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Weekly Downgrade Wrap-UpAs usual, we have a week's worth of ratings actions on the debt of LBO-backed companies from ratings agencies Standard & Poor's Ratings Services and Moody's Investor Services. As has been the trend toward the end of summer, the number of downgrades has significantly fallen off. I noted yesterday that even the number of private equity-backed companies on S&P's "Weakest Links" list seems to have dwindled. The list represents companies which are most likely to default, and part of the reason it's shrunk may be because many of the companies have already defaulted. Company: Builders FirstSource, Inc. Sponsor: JLL Partners Inc. and Warburg Pincus LLC Action: Moody's lowered the company's probability of default rating of to Caa3 from Caa1. Highlight: The downgrade reflects the company's recent announcement that affiliates of JLL Partners and Warburg Pincus, which own approximately 50% of BLDR's outstanding shares, offered to recapitalize the company. Moody's view the situation, as proposed, to be a distressed exchange and the Caa3 PDR anticipates these events.
- peHUB Wire: Tuesday, September 1, 2009
Random Ramblings
- peHUB Wire: Tuesday, September 1, 2009
Random Ramblings
- LBO-Backed Bankruptcy List: On Pace to Double Last Year’s Total
The first two quarters of this year witnessed 46 bankruptcy filings from companies backed by private equity firms. That places 2009 on pace to double last year's total of 49, which is right in line with some predictions from the end of last year. Download the full spreadsheet after the jump. A few notes on the list this quarter: 1. The second quarter list includes our first mega-buyout bankruptcies: Extended Stay Inc., backed by Lightstone Group, and Chrysler, backed of course by Cerberus Capital Management. These deals could be the tip of the mega-bust iceberg, but I think most would agree that they're isolated incidents. We're still waiting, with bated breath, for 2011, when the real flood of mega-buyout debt begins to mature. Until then, the mega-market bankruptcies (ones with deal values greater than $5 billion) will be limited to the most underperforming companies with the most ridiculous capital structures.
- peHUB Wire: Monday, June 15, 2009
Random Ramblings
- peHUB Wire: Monday, June 15, 2009
Random Ramblings