Ex-Private Equity Manager turned Hedge Fund Manager
American Gilsonite: Emerges From Chapter 11
A mining company restructures and two BDCs will convert debt to equity.
The post American Gilsonite: Emerges From Chapter 11 appeared first on BDC Reporter .
American Gilsonite has announced its emergence from Chapter 11 bankruptcy.
The Company filed f or Chapter 11 protection on October 24, 2016, but most of the elements of the restructuring had been pre-packaged.
The second lien lenders will become the new owners of the industrial minerals company, which will be substantially de-leveraged.
There are two BDCs with the bulk of debt exposure to the Company-both in the second lien debt: PennantPark Investment ( PNNT) and PennantPark Floating Rate (PFLT).
The affiliated PennantPark BDCs have written the $26mn investment ($25.4mn at PNNT) down by 30% at September 30, 2016, according to Advantage Data.
The BDC Credit Reporter assumes any Realized Loss to be booked as part of the restructuring will hit the BDCs balance sheets in the IQ of 2017.
We don’t expect much in the way of increase or decrease in the discount to cost in the IVQ of 2016 BDC filings.
Assessing the prospects for the investment in the Company going forward is very difficult at this stage.
We retain a Credit Rating of 5, given a Realized Loss is now in the bag.
From the IQ 2016, the remaining investment will be rated 4 till we get a clearer picture of the Company’s long term prospects.
The existing oans have been on non-accrual but some portion may become income generating following bankruptcy emergence.
American Gilsonite remains a commodity producer, with all the risk entailed.
The post American Gilsonite: Emerges From Chapter 11 appeared first on BDC Reporter .
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