Hi I’m screening for publicly listed companies (equities) on the verge of bankruptcy / liquidity issues by screening through their credit ratios etc. If I were to look out for credit broker reports, what kind of titles or publications should I look out for? I’m more familiar with equity research reports than credit research reports
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I think that screening for ratings would be faster. Focus on lower rated companies and recent downgrades. A mere search on Debtwire or LCD may give you some.
Credit ratings are a bit of a lagging indicator. Go on CapIQ, filter by listed companies, filter by debt securities issued by those companies trading below [80/70/60/50] - there's your universe of distressed Cos.
Thanks! You mean the bond price below 100, so for example it’s trading at 50-90cents on a dollar? Is it under screening for fixed income section on capiq?
Yeah basically. Wouldn't call 90 distressed (usually just macro driven) but once you get below 80 (especially for senior debt) it should be worth taking a look. Yes, you can just screen on CapIQ
In addition to the above recommendations, I would search for 'distress' or 'distressed' in broker reports
I always thought screening for high debt/ebitda multiple suffice for finding these companies. So in addition to that, I have to look for YTM>10% and debt securities trading at less than $100 (so screen for any bond price below $100). Is that correct?
I don’t think that there is one criteria that will give you the full picture but what the debt is trading at is a good start. % debt/enterprise value and debt/ebitda are also good indicators but typically vary by industry.
Search for companies in industries that have been heavily impacted by COVID, mining, oil & gas, leisure, textiles & apparel, restaurants, aeorpspace, etc.
Distressed Stats Weekly (9.28.2020)
Source: Loanconnector.com / aka LPC / aka Refinitiv
Top New Distressed* Loans This Week *loans that have declined to 80 or below
Distressed Universe - Top Distressed Loan Movers, Week Over Week ̶ Key Sectors (9.28.2020)
Top Distressed News
Thank you for this! I have access to eikon refinitiv platform but not its loanconnector platform. I guess it’s a separate subscription. It seems that most of the companies with liquidity issues are in real estate, travel, telco, leisure and retail industries which makes sense due to COVID. Haven’t seen many names in media and tech.
How does loanconnector compare to other debt platforms? I have access to capiq as well but wondering if they offer debt platform as well.
Platforms are good for different purposes
CapIQ - source public info, legal docs FAST (10K, credit agreement, etc)
Loanconnector - IG and pro rata loans mostly (RC / TLA)
LCD, LFI - leveraged, institutional term loan B's (1L/2L TLB)
I like LFI and LCD the best.
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