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1Abraxas Group
www.abraxasgp.com
Lenders Can Only Watch as
Covenant-Lite Debt Strips Influence:
Restructuring Recap
October 25, 2016
“...now I'm a spent firework; but at least I've been a
firework.”
‒ David Mitchell, Cloud Atlas
Abraxas Group
www.abraxasgp.com2
• David Johnson is a career change agent who has served as interim manager or financial advisor on over $5 Billion of distressed middle market transactions.
• In his nearly 20 years as a change agent, David has served as an advisor, board member, interim manager, investor and operator at organizations ranging in size from pre-revenue startups to the Fortune 500.
• David has several publications to his credit and is a regular speaker on the topics of change management, performance improvement, turnaround and restructuring. He received his MBA from the University of Chicago and completed his undergraduate studies at Fairleigh Dickinson University.
David Johnson
Abraxas Group
www.abraxasgp.com3
Email: [email protected]
Ph: 312-505-7238
Twitter: @TurnaroundDavid
• The majority of high yield issues in 2016 have been “covenant lite”.
• The challenge of these structures is that, when companies begin to show signs of strain, creditors are powerless to act.
Lenders Can Only Watch as Covenant-Lite Debt
Strips Influence
Abraxas Group
www.abraxasgp.com4
Links (here, here)
Twitter: @ejorr_6 | @rob_cyran
Inside the Catastrophe at Mode Media
Abraxas Group
www.abraxasgp.com5
The story of the reckless pursuit of growth over profitability, a shifting competitive landscape, and investors losing faith, is very familiar; perhaps highlighting the fact that the fundamentals of business remain the same, no matter the numbers involved.
Link
Twitter: @nmcalone
Department Stores are struggling to rationalize their footprints as customers continue their embrace of ecommerce.
More Than 700 Department Stores Have Closed
Since 2013
Abraxas Group
www.abraxasgp.com6
Link
Twitter: @philwahba
The Valuation History That Led to One Kings
Lane’s Fire Sale
Ecommerce startup One Kings Lane raised over $200 million between its founding, in 2009, and its last round, in 2014. That final round valued the company at over $800 million. Less than three years later, the would-be disrupter was sold to Bed Bath & Beyond for $11.8 million, highlighting the brutal economics of startups.
Abraxas Group
www.abraxasgp.com7
Links (here, here)
Twitter: @mikeytom | @danprimack
Houston’s Plan to Cut Pension Costs in Half
Overnight
Abraxas Group
www.abraxasgp.com8
Houston Pension Approach
Links (here, here)
Twitter: @LizFarmerTweets | @BillFultonVta
Experts have been impressed by the recent proposal of Houston Mayor Sylvester Turner to reduce his city’s $7.7 billion unfunded liability by nearly 50 percent.
Total Unfunded Liability 7.7$ B
Less: Concessions
Police -1.1
Fire -0.8
Municipal Employees -0.7
Total Concessions -2.6
Less: Pension Obligation Bond -1.0
Total Reductions -3.6
Remaining Unfunded Liability 4.1$ B
Source: Kinder Institute
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