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$462 Million Loan BWIC Due At 2 PM
Another credit fund has given up the ghost and the fight over the spoils begins: 2pm BWIC deadline for over $450 million loans. Oddly, with leveraged loans returning over 40% YTD, and these guys obviously believe that diversification away from Term Loan B's is a waste of time, somehow they managed to still shoot themselves in the foot. Well, we wish them well on their way to padding the BLS' U-6 number, and in the meantime here is a listing of their holdings: top five holdings consist of Regal Cinemas, Penn National, Neiman Marcus, CHS and Dollarama. By their holdings it seems that this was a rather diversified loan fund with holdings in virtually every sector, implying that the PMs would buy whatever their prime broker/sales coverage would pitch them: always a very sound and stable money management strategy.
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PULL TO PAR!!
I once interviewed for a position at Penn National Gaming (PENN). One of the shadier operations, I turned down their offer. It was like interviewing for Tony Soprano or the notorious gangster Vincent Popotopli. The CFO said, "It's amazing what people will do for money."
Wonder if AIG has any of these assets - its qtr end book value is $540.19 per share. I thought they meant in total! Still pro forma is $40 - kinda wondering what happend to the other $500.
Could be that they held on long enough to recover some losses and don't see any further upside.
I trust the folks here know what a BWIC means. This is useless without any color on how the list trades, for the record, so we can look forward to those highlights late today or Monday perhaps ?
bwic is not necessarily sign of stress. many have been doing these lately as a way to take profits. so one should be mindful that smart folks in credit know things are too pricey here (so they are unloading). yes bwic can also be sign of stress/blow-up, but it is almost impossible that that is the case here. The only blowup possible would be if this was a leveraged portfolio and they couldnt roll the facility. but if that were the case it would imply more stress in the HY and loan market than is currently seen.
Based on the size of the list, the spreads, the total dollar amount, and the number of delayed draws, this appears to be the unwind of a $500MM CLO vintage 2006.
Scratch that. Since CLOs do not have forced unwinds, it is more likely a CLO warehouse facility from 2006 that cannot get funding to keep open.
Based on the size of the list, the spreads, the total dollar amount, and the number of delayed draws, this appears to be the unwind of a $500MM CLO vintage 2006.
Scratch that. Since CLOs do not have forced unwinds, it is more likely a CLO warehouse facility from 2006 that cannot get funding to keep open.
test
It's likely that this is a CLO that has violated it's overcollateralization tests due to an outsized number of CCC positions. If that's the case, the manager is likely not getting paid much, if at all, and liability holders could be forcing a liquidation to get paid back. Not a bad idea at the moment given loans trading around 90 cents on the dollar. Equity will get wiped out, but the CLO debt will be made whole.
Also, the diversification is not due to poor management, it's a strict requirement for CLOs outlined in the indentures.