content

Bankruptcy: Overseas Shipholding nets court confirmation of reorganization plan; history, analysis

The bankruptcy court overseeing the Chapter 11 proceedings of Overseas Shipholding Group has confirmed the company’s reorganization plan, according to an order filed on the court docket.

The confirmation hearing was held today.

As reported, the bankruptcy court approved the adequacy of the company’s disclosure statement on May 27.

The company filed for Chapter 11 on Nov. 14, 2012, in Wilmington, Del., after a potential tax liability of more than $460 million came to light. The liability issue arose after the company determined that because certain U.S. subsidiaries of the company were co-obligors with certain of the company’s international units under its credit facilities, those international units could be deemed to have made some $3.2 billion in taxable distributions to the company, arising out of drawdowns on the facility. Among other things, the revelation led to a restatement of the company’s financials for 12 years, from 2000 through 2012, not to mention litigation, still pending in state court in New York, between the company and its former counsel, Proskauer Rose, over the legal advice and services that allegedly gave rise to the liability.

Ultimately, the company settled the IRS claim in December 2013 for $264.3 million (see “Overseas Shipholding says IRS claim reduced to $264.3M,” LCD, Dec. 20, 2013).

With that issue resolved, the company entered into a plan support agreement in February with lenders under its $1.5 billion credit facility, its senior tranche of debt thanks to guarantees by the company’s operating subsidiaries, under which lenders would receive nearly all of the equity in the reorganized company, except for $61.4 million of reorganized equity value that would be distributed to current equity holders via stock and warrants.

Shortly after that, however, the existence of two alternative reorganization proposals from separate shareholder groups that had formed in the case was disclosed.

Still, on March 7 the company filed its proposed reorganization plan reflecting the terms of its plan support pact, now supported by lenders holding 72% of the credit agreement claims (see “Overseas Shipholding files plan; disclosure-stmt hearing on April 11,” LCD, March 10, 2014).

On March 17, however, the bankruptcy court appointed an official equity committee in the case. The panel then made a single alternate shareholder reorganization proposal that, the panel said, would provide all of the company’s creditors with “full value or otherwise unimpaired treatment” and would also provide a recovery for equity holders “significantly greater” than that provided for in the company’s proposed reorganization plan.

On April 7, after the equity committee dropped its objection, the bankruptcy court approved the plan support agreement between the company and its lenders, with a May 7 disclosure statement hearing marked as the next hurdle for the company/lender plan.

Before that could occur, the company on May 2 filed an amended plan backed by the equity committee (see “Overseas Shipholding files amended plan; rights offering detailed,” LCD, May 5, 2014). This is the plan, following several amendments to tweak it over ensuing months, that was confirmed today.

Under the plan, lenders under the company’s $1.5 billion credit agreement will be repaid in cash.

The company’s unsecured and secured creditors, meanwhile, are to receive 100% of their claims. To that end, holders of the company’s 7.5% unsecured notes due in 2024 (with about $148.7 million outstanding as of the petition date) and 8.125% senior notes due in 2018 (with about $303 million outstanding as of the petition date) will be reinstated, following payment of outstanding interest, although holders of the 7.5% notes will have the additional option to receive “Election Notes” that contain terms similar to the 7.5% notes, but would mature in 2021 and also pay holders on the effective date an additional 1% of their principal amount of 7.5% notes in cash, an amount that was tacked on to settle an objection from an ad hoc panel of noteholders that the company’s reorganization plan would trigger provisions in the notes’ indenture mandating cash redemption at 101% of principal value.

All other claims, including the company’s 8.75% unsecured notes due 2013 (with about $66.1 million outstanding as of the petition date), the company’s secured facility from the Export-Import Bank of China, or CEXIM (with about $312 million outstanding as of the petition date), and the Danish Ship Finance secured facility (with about $267 million outstanding as of the petition date) will be paid in full in cash, with an additional 1% default rate tacked on to the CEXIM and DSF payments.

The plan will be funded via a $1.510 billion rights offering under which current equity holders would receive a subscription right to purchase 12 class A securities at $3 per security. The rights offering is backstopped by a group of 17 parties comprised of Alden Global Capital, BHR Capital, BlueCrest Capital, BlueMountain Capital, Brownstone Investment Group, Caspian Capital, Caxton International, Cerberus, Credit Value Partners, Cyrus Capital, Goldman Sachs, Knighthead Capital, Luxor Capital, Paulson & Co., Silver Point Capital, Stone Lion Capital, and Strategic Resources (see “Overseas Shipholding again amends plan, rights offer,” LCD, May 27, 2014). Equityholders that do not participate in the rights offering will be entitled to receive one share of a new class B security in the reorganized company for each current share of Overseas Shipholding held.

Also backing the plan is a $1.35 billion exit facility comprised of two five-year terms loans – a $625 million loan at OSG International (L+475, 1% LIBOR floor) and a $600 million loan at OSG Bulk Ships (L+425, 1% floor) – and a $50 million cash-flow revolver at OSG International and a $75 million asset-based RC at OSG Bulk Ships (see “Overseas Shipholding exit loans allocate, break above OIDs; terms,” LCD, July 7, 2014). – Alan Zimmerman

 

content

Energy Future Holdings acquisition: NextEra, noteholder group up offer


energyfutureholdings

NextEra Energy, acting in concert with an ad hoc group of second-lien bondholders of Energy Future Intermediate Holdings (EFIH), has increased its offer to acquire EFIH and its parent, Energy Future Holdings, out of Chapter 11 in a transaction that NextEra said would provide about “$180 million of additional value available for consensual settlements throughout the debtors’ capital structure.”

The revised transaction from NextEra, detailed in a letter and term sheet dated July 16 that was e-mailed to the company and that was attached as an exhibit to a bankruptcy court filing, involves a two-step process that would be implemented following the tax-free spin-off of Energy Future’s unit Texas Competitive Electric Holdings, the intermediate holding company for Energy Future’s unregulated power producing and retailing operations, that is already contemplated under the company’s proposed pre-arranged reorganization plan.

As reported, EFIH is the intermediate holding company of Energy Future that controls 80% of Oncor, a regulated utility.

In the first step, NextEra would either purchase 41% of the equity in the reorganized company pursuant to a reorganization plan for $1.625 billion, or alternatively, would invest $1.625 billion in a new second-lien DIP. This investment (including certain PIK interest under the contemplated DIP facility and a $75 million PIK funding fee) would then be converted into 42% of the reorganized company’s equity pursuant to a reorganization plan. The investment “would be part of a larger mandatorily convertible second-lien debtor-in-possession facility that would involve the rollover of a portion of EFIH’s prepetition second-lien notes into notes under such facility.” Interest under the second-lien DIP would be at 6% per annum (payable partially in-kind and partially in cash to NextEra, and payable in cash with respect to the portion provided by current second-lien noteholders).

In the second step of the transaction, NextEra would acquire the remainder of reorganized Energy Future through a merger in exchange for NextEra stock in an amount sufficient to, along with other funding, make all of the required distributions to EFIH and Energy Future creditors pursuant to the proposed reorganization plan, such that the total consideration paid by NextEra, as well as the distributions received by received by EFIH and Energy Future creditors, would consist of 50% cash and 50% NextEra equity.

The contemplated reorganization plan would see EFIH’s current second-lien noteholders, owed roughly $2.1 billion in principal, receive all principal, accrued and unpaid interest, and the entire disputed make-whole payment claimed by second-lien lenders (roughly $700 million), less $25 million, with payment comprised of 50% cash and 50% NextEra stock.

Holders of the EFIH unsecured 11.25% toggle notes, owed about $1.4 billion, would receive all principal due plus, if required by the bankruptcy court (or at NextEra’s discretion), any accrued and unpaid interest and any make-whole payments. Holders of parent company unsecured LBO notes due 2017, with roughly $60 million outstanding, would also receive all principal due plus, if required by the bankruptcy court (or at NextEra’s discretion), any accrued and unpaid interest and make-whole payments. In both cases, payment would be comprised of 50% cash and 50% NextEra stock. Fidelity is known to be a primary holder of this debt.

Energy Future’s legacy noteholders, meanwhile, would receive NextEra stock in an amount equal to 0.4% of Energy Future’s reorganized equity, plus any residual cash at Energy Future Holdings, the parent company. NextEra said that would amount to $20 million more in cash than under the company’s currently proposed pre-arranged reorganization plan.

Lastly, Energy Future current equity sponsors would receive NextEra stock in an amount equal to 0.4% of Energy Future’s reorganized equity.

In the June 16 letter, NextEra said its deal “implies a significantly higher enterprise valuation for Oncor than the implied enterprise valuation under the [company’s pre-arranged reorganization plan], with an approximate $500 million increase over our prior proposal.

Meanwhile, NextEra’s increased offer is just the latest in a flurry of activity ahead of a key status hearing in the case set for tomorrow morning in Wilmington, Del.

The status hearing follows the company’s notice to the bankruptcy court on July 8 that it would delay consideration of its proposed second-lien financing for EFIH that was to have been provided by holders of EFIH toggle notes along with Fidelity, which was a key piece of Energy Future’s proposed pre-arranged global restructuring plan, in order “to provide the time needed to address … postpetition developments potentially beneficial to” the bankrupt company.

The company did not specify what those “potentially beneficial” developments were, but said it would provide a comprehensive status report at the start of tomorrow’s hearing.

Then on Tuesday, Debtwire reported – citing unnamed sources – that first-lien creditors at TCEH planned to terminate their support of the company’s global reorganization settlement due to several reasons, including the higher valuations at EFIH contemplated by NextEra’s bid for the company, the company’s delay in gaining approval of the second-lien DIP, and the recent disclosure of a $773 million intercompany debt owed by the parent company to TCEH. – Alan Zimmerman

 

content

Bankruptcy: Exide creditor panel objects to new DIP, at issue is noteholders’ control

The unsecured creditors’ committee in the Chapter 11 proceedings of Exide Technologies has filed a “limited objection” to the company’s proposed increase of its DIP facility, saying the terms of the additional financing “inappropriately favor the [unofficial noteholders’ committee in the case], are unduly prejudicial to the rights of unsecured creditors, and are not in the best interests of the debtor’s estate.”

Of particular concern to the unsecured creditors’ panel is a requirement of the additional $65 million financing that the company enter into a plan support agreement with the noteholders’ committee.

As reported, the company announced on July 1 that it had received a non-binding reorganization proposal from an unofficial committee of senior secured noteholders that “contemplates substantial deleveraging of the company’s debt by more than $700 million, a sizable investment of new equity capital, and new debt to fund the [company’s] emergence and post-emergence business.” The company further said that the proposed new debt issuance would be about $185 million, and would be backstopped by “certain members” of the unofficial committee, as well as a new asset based loan facility to be obtained from third-party lenders in connection with a reorganization plan confirmation. The proposed new equity investment, meanwhile, would consist of roughly $300 million of preferred convertible equity, a portion of which would be issued through a rights offering backstopped by the unofficial committee, with the balance in the form of a direct equity purchase by committee members (see “Exide says noteholder panel’s proposed plan is ‘highly constructive’,” LCD, July 1, 2014).

A week later, the company announced a proposed amendment to its DIP facility that would upsize the $500 million DIP by $65 million to bridge the company’s “way through the plan negotiation and confirmation process.” In that motion, the company also said the previously announced noteholder committee proposal was “the likely path the debtor will follow in order to emerge from Chapter 11 in the near term with its operating business intact, a healthy balance sheet, and the capital resources necessary for considerable investment in Exide businesses.” (See “Exide upsizes DIP by $65M; says panel proposal is likely reorg path,” LCD, July 8, 2014).

But according to the unsecured creditors’ committee objection filed on July 15, so far the company has “refused to negotiate with the [creditors’] committee, or, for that matter, any party other than the [noteholders’ committee] in connection with the structure of a plan of reorganization and an exit strategy. The debtor has also shunned the [creditors’] committee’s efforts to open the plan process to third parties.”

According to the panel, the DIP amendment’s requirement that the company enter into a PSA with the noteholder committee will likely force the company to simply back the noteholders’ proposed reorganization plan, even though the company has yet to share the terms of the PSA with either the committee or the bankruptcy court, or to publicly disclose any of its terms.

‘More specifically,” the unsecured creditors’ committee said, “the PSA will likely tie the debtor’s hands by prohibiting the debtor from negotiating with any of its other major creditor constituencies or amending the PSA in a manner adverse to the [noteholders’ committee]. Essentially, these restrictions will likely give the [noteholders’ committee] complete control over the contents of the plan of reorganization, despite the fact that the debtor is supposed to be the architect of the plan with duties to negotiate with and treat all constituencies fairly.”

The unsecured creditors’ committee also notes that the lock-up embodied in the PSA is exacerbated by the fact that the existing DIP facility already requires the company to file a reorganization plan by July 31, a milestone deadline the committee wants to see eliminated.

The committee said that while it did not object to a different milestone deadline in the DIP facility, namely, a Dec. 31 deadline to emerge from bankruptcy, it “does not believe there is any reason why a plan must be filed by July 31.” The committee called that milestone “an artificial deadline that only benefits the [noteholders’ committee] by granting them further unfair dominance and control over the most important aspect of any Chapter 11 case – the negotiation and development of a plan of reorganization – without opening a plan process to third parties.” The committee said that since the company’s assets were not declining in value and lenders had adequate protection in place, “such additional milestones simply are unnecessary, unreasonable, and not in the best interests of the estate as a whole.”

Last, but not least, the panel said the fees associated with the upsizing of the DIP “appear to be excessive.” Total fees, the objection said, would amount to $5 million, or about 7.7% of the funds being advanced, even though the term of the additional DIP borrowings would be only four months.

As reported, a hearing on approval of the additional DIP borrowings is scheduled for July 22 in Wilmington, Del. – Alan Zimmerman

content

Molycorp cut to CCC on unsustainable capital structure; bonds trade down

Molycorp this morning was downgraded by S&P to CCC, from CCC+, on the view that the rare-minerals mining concern has an unsustainable capital structure and that its liquidity position will continue to erode over the next 12  months. The outlook was revised to negative, from developing.

The company’s secured notes were also lowered to CCC, with a recovery rating still at 3, reflecting expectations for meaningful recovery (50-70%) in the event of default. The company’s unsecured convertible notes were lowered to CCC-, from CCC, with the recovery rating at 5, indicating expectation for modest recovery prospects (10-30%).

The secured notes – a $650 million issue of 10% notes due 2020 – changed hands many times this morning in small lots ranging from 92-93.5, trade data show. Market players relay quotes in the Street at 92.5/93.5, which is up half a point this week but down four points from prior to the release of first-quarter results in early May.

Recall that lows were in the high 80s that month (see “Molycorp bonds trade down further ahead of investor-day webcast,” LCD News, May 14, 2014).

As for today’s downgrade, which puts the notes at a CCC/B3 profile, S&P said “sources of liquidity may not be sufficient to cover operational and working capital needs, interest, and capital spending over the next year.”

“We believe it is likely to conduct some form of capital restructuring during that time, which could include a distressed debt exchange,” explained S&P credit analyst David M. Kuntz.

S&P also flagged “execution risk at and reliance upon its Mountain Pass facility, volatile rate earth elements pricing, and the large fixed nature of its cost structure.”

“[Business risk profile] also incorporates the company’s poor track record of operating performance and our forecast for further weak results,” outlined Kuntz.

As reported, Molycorp posted in May net revenue of $118.5 million, a 4% decrease sequentially and roughly an 18% decrease versus the year-ago first quarter, according to corporate filings. Management cited “a shifting product mix,” with higher sales in chemicals and oxides offset by lower sales in the resources segment, and softer pricing for rare earths and magnetic powders, filings show.

Results showed negative EBITDA of about $28 million, versus the consensus mean estimate for negative $10 million, according to S&P Capital IQ.

Second-quarter results are due publicly on Aug. 6, 2014, and an investor call is scheduled for the following morning, on Aug. 7, 2014 at 9:00 a.m. EDT, according to the firm.

Greenwood Village, Colo.-based Molycorp placed the $650 million issue of 10% secured notes in a speculative-grade corporate debut in May 2012 backing an acquisition of Neo Material Technologies. Bookrunners were Morgan Stanley and Credit Suisse, with ratings of B/B2 at offer. – Matt Fuller

Follow Matthew on Twitter @mfuller2009 for leveraged debt deal-flow, fund-flow, trading news, and more.

content

inVentiv launches refi into new B-4 TL, seeks nod on note exchange

Citigroup today launched a $445.7 million TLB-4 for inVentiv Health that would be used to repay the issuer’s B1-2 term debt maturing in 2016, sources said.

The new loan would match pricing and maturity of the current TLB-3 due May 2018 which is priced at L+625, with a 1.5% LIBOR floor. The B-4 is offered at 99.75-100, sources said. However, the B-4 would have 12 months of 101 soft call protection, while the B-3 currently has a 102 soft call, stepping down to 101. The B1-2 debt is coming out at par.

The issuer is also seeking an amendment that would permit the exchange of a portion of its senior notes into new junior secured PIK debt and allow for funds affiliated with Thomas H. Lee Partners, L.P. and other existing investors to invest roughly an additional $50 million of capital into inVentiv, which would come in as debt.

The issuer is looking to move up to $482 million of its $811.2 million of 10% unsecured notes due August 2018 into a  junior, third-lien PIK toggle issue, also maturing in August 2018. If interest is paid in cash, the notes would bear interest at 10%, jumping to 12% if the issuer elects PIK interest.

The sponsor money would come in as $51.3 million of debt comprising $25 million of the junior secured PIK toggle debt and $26.3 million of senior notes. Proceeds of the investment would go on the balance sheet as cash. Holders representing $350 million of notes  have already agreed to participate, sources noted.

There is a fee of five basis points on offer for the amendment. Commitments are due on July 22.

The B1-2 loans due 2016 total $445.7 million currently. The B-3 currently totals $130.6 million, while pari pass secured notes due January 2018 total $625.6 million. The B-3 loan includes a springing maturity to October 2017 if the first-lien notes are still outstanding, sources noted.

The net leverage total is 9.69x, and net first-lien leverage is 5.7x. If the transaction is completed as presented, net first-lien leverage falls to 5.5x, but net secured leverage jumps to 8x, and total net leverage increases marginally to 9.7x. – Chris Donnelly

content

Rex Energy upsized 8-year notes price at par to yield 6.25%; terms

Rex Energy today completed its $325 million offering of senior notes via RBC, SunTrust Robinson Humphrey, Wells Fargo, and KeyBanc. Terms were finalized at the tight end of talk, along with a $75 million upsize. Proceeds will be used to repay amounts outstanding under the borrower’s RCF, and for general corporate purposes. Rex Energy, based in State College, Pa., operates as an independent oil-and-gas company in the Appalachian Basin and the Illinois Basin, focusing on Marcellus Shale drilling projects and Utica Shale and Upper Devonian Shale exploration activities. Terms:

Issuer Rex Energy
Ratings B-/B3
Amount $325 million
Issue senior (144A)
Coupon 6.25%
Price 100
Yield 6.25%
Spread T+391
Maturity Aug. 1, 2022
Call nc3 @par+75% coupon
Trade July 14, 2014
Settle July 17, 2014 (T+3)
Bookrunners RBC/STRH/WFS/Key
Sr. Co-Managers BMO/MUFG/CapOne/USB
Co-Managers The Huntington Investment Company
Price talk 6.25-6.5%
Notes Upsized by $75 million; first call at par +75% coupon.

This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

Bonanza Creek Energy returns to market with $300M high yield bond offering

Bonanza Creek Energy is back in market after eight months with a $300 million offering of 8.5-year (non-call four) senior notes via an RBC-helmed bookrunner team that includes joint books Wells Fargo, J.P. Morgan, KeyBanc, and BMO, according to sources. The deal is today’s business, with pricing expected following an 11:00 a.m. EDT investor call, the sources added.

Proceeds will be used to repay all RC borrowings and fund general corporate purposes, which may include supporting oil and gas drilling and development, as well as capital expenditures, according to SEC filings. It’s a public offering, and existing senior note ratings are B-/B3.

That’s the profile on Bonanza Creek’s $500 million series of 6.75% notes due 2021, which represented a market debut in April 2013 followed by a $200 million add-on in November. Pricing of the latter was 104.5, to yield 5.77%, but the paper now trades at 107, yielding about 5.1% to worst, with a first call at par plus 50% coupon in 2017, trade data show.

Denver, Colo.-based Bonanza Creek primarily engages in development and production in the Wattenberg Field in Colorado and the Dorcheat Macedonia Field in southern Arkansas. The company’s shares trade on the NYSE under the ticker BCEI with an approximate market capitalization of $2.4 billion. – Matt Fuller

Follow Matthew on Twitter @mfuller2009 for leveraged debt deal-flow, fund-flow, trading news, and more.

content

McGraw-Hill Education $400M PIK toggle notes price at 8.75% yield

McGraw-Hill Education today completed its $400 million offering of senior PIK toggle notes via Credit Suisse, Morgan Stanley, Jefferies, UBS, Nomura, and BMO. Terms were finalized at the midpoint of talk. Note the bonds feature a 100% equity clawback at 102 in the first year and 101 in the second year. This marks the third PIK toggle deal with a 100% claw option this year, though there have been several with 40%. The feature might flag a near-term IPO. Proceeds from the company’s return to market after 15 months will be used to fund a dividend to shareholders. The company was bought by Apollo Management for $2.5 billion in a deal that closed in March 2013. Apollo invested $950 million in equity. Terms:

Issuer McGraw-Hill Education via MHGE Parent, LLC and MHGE Parent Finance, Inc.
Ratings B-/Caa1
Amount $400 million
Issue senior PIK toggle (144A-life)
Coupon 8.5%/9.25%
Price 99
Yield 8.748%
Spread T+703
Maturity Aug. 1, 2019
Call nc2 @102, then 101, par
Trade July 14, 2014
Settle July 17, 2014 (T+3)
Bookrunners CS/MS/Jeff/UBS/Nomura/BMO
Price talk 8.5% area, at 99
Notes First call at 102, then 101. 100% equity clawback at 102 in first year, then 101 in second year.
content

Gymboree leveraged loan, bonds slump as CFO, Evan Price, resigns

Debt backing Gymboree slid this morning on news that CFO Evan Price has resigned as CFO. In the bond market, Gymboree’s 9.125% notes due 2018 were quoted down about five points on the news, quoted at 61/63, sources said.

The issuer’s covenant-lite term loan due 2018 (L+350, 1% floor) fell to an 83/85 market this morning, down from 85/86.5 on Friday, according to sources.

The company disclosed Price’s departure in an SEC filing this morning. He is leaving the company effective July 24 to pursue another opportunity. Lynda Gustafson, a senior advisor to the company, will act as interim CFO.

There was about $768 million outstanding under the company’s term loan as of May 3, SEC filings show. The term loan was placed in November 2010 to back Bain Capital’s acquisition of the retailer, but in February 2011 the issuer repriced the loan and stripped financial covenants. Credit Suisse is administrative agent.

The company’s $400 million issue of 9.125% notes was placed in November 2010 also in support of the LBO. The company late last year repurchased $54 million of the CCC-/Caa3 paper through privately negotiated transactions, so there’s $346 million outstanding.

CCC+/Caa1 Gymboree operates child-parent-development play and music programs at franchised and company-operated centers, mostly in the U.S. and Canada, and sells children’s and baby clothing and products online at www.gymboree.com, www.janieandjack.com and www.crazy8.com. – Kerry Kantin/Joy Ferguson 

content

American Media bonds edge higher on takeover news, default waiver

American Media 11.5% first-lien notes due 2017 added one point, to 106/107, and traded in blocks at the low end of that quote, after the company revealed a takeover by an unnamed investor and a loan-default waiver to address a late annual report. The news comes a week after the company delayed its 10-K filing and a “going concern” warning was raised after the magazine publisher’s major wholesaler filed for bankruptcy.

Unnamed investors will acquire 100% of the private common shares of American Media for $2 million and the assumption of roughly $513 million of debt, for an implied enterprise value of $515 million, according to an SEC filing. The agreement also includes $5 million via an unsecured delayed-draw loan facility; a provision for another $7.5 million by Dec. 15; and a waiver of mandatory-buyback payments on the company’s $94 million issue of 10%/13.5% second-lien PIK-toggle exchange notes due 2018, saving the firm $12.7 million, the filings show.

The deal also carries a 30-day “go-shop” provision “ to seek a competing transaction,” and the company intends to seek a waiver for the change-of-control put provision on the first-lien notes, filings show. Current investors support the latter, and other bondholders will be engaged for such, the filing shows.

The default waiver on a revolving credit line, with J.P. Morgan as administrative agent, runs until July 15, but the company intends to seek an additional waiver by then, the filings show.

With the additional roughly $25 million via the new money and cost savings, market sources relay an expectation that there will be no going-concern warning when the delayed 10-K is filed.

As reported, American Media exited a prepackaged Chapter 11 in December 2010, with subordinated noteholders, which included Angelo Gordon, Avenue Capital and Capital Research, in control of the company. The company entered Chapter 11 with total liabilities of $1.23 billion, and exited with $385 million initially of the 11.5% first-lien notes, $140 million of 13.5% second-lien notes due 2018, and a $40 million revolving credit facility.

The 13.5% paper was swapped into the PIK-toggle debt last year, filings show. Also recall that three years ago the New York Post reported that Apollo Management may be interested in the firm, which owns, among other properties, the National Enquirer, StarShape, and Muscle & Fitness. – Matt Fuller

Follow Matthew on Twitter @mfuller2009 for leveraged debt deal-flow, fund-flow, trading news, and more.