Instant Brands' prepetition term loan recently changed hands, with Centre Lane Partners emerging as the new majority holder of the paper, according to three sources familiar with the matter.
In a Rule 2019 Statement filed on the court docket on 13 June, an ad hoc group of lenders disclosed their positions in the loan, naming PIMCO as the consortium's largest holder, with a 21.3% or USD 83.3m investment, followed by AGL Credit Management, holding 9.9% or USD 38.5m of the term loan and Aegon USA Investment Management, with a 9.3% or USD 36.2m position. Collectively, the group – advised by Ropes & Gray – held USD 258.1m or 66% of the term loan at the time.
The loan was last quoted 18.5/24, versus a recent low of 11/19.75 in late May and versus 36.8/40.6 on 1 May, according to Markit.
In addition to the USD 390.9m prepetition term loan due 2028, the bankrupt consumer lifestyle brands company and maker of the Instant Pot brand of multicookers had USD 121.4m outstanding on an asset-based revolver as of its 12 June petition date.
The debtor received interim access to its USD 237.5m DIP during its first day hearing on 13 June. The super-priority financing comprises a USD 125m asset-based revolver and a USD 132.5m term loan. According to the DIP financing motion, proceeds from the DIP ABL will fully repay the company's prepetition ABL facility. The debtor will then use USD 100m of the DIP term loan to pay down the DIP ABL.
The company took on its current form in 2019, when Corelle Brands acquired the business. Corelle changed its name to Instant Brands and folded in its other brands into the merged company, including Pyrex, Chicago Cutler, and Visions. Investment firm Cornell Capital holds 70% of the combined entity’s common equity. The debtor filed for bankruptcy in the face of liquidity struggles, as supply chain disruptions, rising inflation and lower demand contributed to earnings declines.
To combat the cash crunch, in January 2023, Instant Brands completed a deal, but the need for the financing at all was “negatively perceived,” by the market, Chief Restructuring Office Adam Hollerbach said in his first day declaration. In order to increase the availability on its ABL, the company formed two “UnSub” units and transferred assets at its manufacturing facilities in New York and Pennsylvania to UnSub. At the same time, Goldman Sachs issued a USD 55m ABL backstop letter of credit to Cornell, which then provided the USD 55m in a loan to Instant secured by a lien on the UnSub assets. With Cornell on the hook to Goldman for the letter of credit, Instant Brands aims to use part of its term loan DIP financing to repay Cornell and remove the liens on its manufacturing facilities.
Representatives from Centre Lane and PIMCO did not return calls seeking comment.