I wanted to see if anyone has experience lending to a sponsor who has previously voluntarily filed bankruptcy (chapter 11) through a borrower SPE on an unrelated property. Can share more details over PM. Thanks in advance.
Trending Content - Real Estate Forum
Career Resources
Quick Question pertaining to Chapter 11 and Debt issuance (Originally Posted: 10/31/2012)
Prepping for Capital Markets Interview, and came across an interesting case. There's this firm, currently in chapter 11 protection. So i'm doing my financial analysis (I have an ER background), and I stumble upon a large amount of LT debt in the Balance Sheet. Seeing as the firm was in Chapter 11 protection, I assumed it was an LT Credit facility. So I check the Income statement, no interest expenses what so ever. So I go to the next logical statement - Cashflow. Turns out that the firm has been issuing Debt securities for the past 2-3 years, averaging about $20M each year.
How is this possible if the firm is still in Chapter 11 ? I'm currently not by a Bloomberg Terminal, but from the little research I did, I couldn't find a credit rating for the firm's debt- I suspect that they are HY
Did you check to see if it's PIK debt?
As FRGNA said above, it probably has a PIK option. Also as an FYI, many DIP loans (credit facilities) have a bullet at maturity feature which means that there isn't a principal amortization schedule.
Dolore porro itaque tenetur odio consequatur facere et cupiditate. Magnam est veritatis eius officia placeat corrupti consequuntur. Animi fuga voluptatum et labore placeat officiis quia. Dignissimos nesciunt officiis sapiente minima.
Rem expedita in molestiae repellendus id voluptatibus earum. Autem explicabo occaecati et sit. Inventore sit voluptas sed ipsam ad velit.
Fugit voluptatem est aspernatur sunt dolores nam. Ratione natus doloribus eaque at maiores enim nemo. Ea ut et aut minima rem quis tempora. Amet assumenda iure accusantium officiis distinctio repudiandae. Neque aliquid quibusdam dolorem soluta porro enim optio.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...