Out of a leveraged universe of over 12,000 US companies, 180 lie in the stressed/distressed lifecycle categories – comprising Debtwire’s likely-to-distress (LTD) scores of 50-99, with 600 in ongoing restructuring.
Analysing the companies within the stressed and distressed bands by sector, the eight firms within the transportation sector make up the highest average LTD score at 87. Meanwhile, the industrials sector has the highest number of companies in the stressed and distressed lifecycles with 34 companies encompassing LTD scores ranging from 50 to 90, however this constitutes only 2% of all US industrials firms.
Out of a leveraged universe of over 12,000 US companies, 180 lie in the stressed/distressed lifecycle categories – comprising Debtwire’s likely-to-distress (LTD) scores of 50-99, with 600 in ongoing restructuring.
Analysing the companies within the stressed and distressed bands by sector, the eight firms within the transportation sector make up the highest average LTD score at 87. Meanwhile, the industrials sector has the highest number of companies in the stressed and distressed lifecycles with 34 companies encompassing LTD scores ranging from 50 to 90, however this constitutes only 2% of all US industrials firms.
Deeper in distress
The second bucket lies much closer to a potential restructuring at between 92-99, comprising Silver Lake and Atairos’ radio and TV programming firm Learfield Communications, Centerbridge’s mobile satellite voice and data provider Ligado Networks and publicly-owned radio and podcast broadcaster Audacy.
Looking a little deeper into each of these names, the earlier mentioned Learfield is firmly within the category having an upcoming debt maturity wall of USD 1.1bn across its four term loans despite its current SOFR+ 13% PIK term loan currently maintaining a bid price of 91.75. The firm was last heard to be in restructuring talks at the end of July with Kirkland & Ellis advising the company, according to CEO Cole Gahagan’s statement to Sportico.
The company’s already tricky business model of guaranteed payments to colleges for the ability to sell sponsorship and multimedia rights suffered a harsh fate amid the pandemic-induced sports attendance limitations.
Meanwhile, Ligado has also taken on some PIK instruments, though its senior secured 2023 and 2024 notes are priced at 36.56 and 10.6, respectively. The firm also has a USD 2.85bn note due to mature in November this year.
While the firm has attempted to raise capital to address its liquidity issues, the firm faces regulatory difficulties with its operation in frequency bands potentially interfering with GPS capabilities used by the US Department of Defense. Last month, Canadian authorities denied the firm operating permissions, leaving the potential reversal of the Federal Communications Commission’s decision in 2020 to allow operation within the frequencies in question.
While Audacity’s debt maturities lie further ahead, with its closest meaningful debt maturity in late 2024, the firm has the highest LTD score in the industry, with the firm suffering a downgrade to CCC- by S&P in May following consistent EBITDA deterioration over the past few quarters.
The Wall Street Journal reported earlier this month that the firm is set to begin restructuring negotiations on its USD 1.9bn debt pile amid struggles with declining advertising revenue.
