Cloud 9fin Jane's LME Addiction: Never been in Better Health
8 snips
Feb 13, 2025 Jon Henes, founder of C Street Advisory Group, and George Klidonas, restructuring partner at Latham & Watkins, dive into the dynamic world of liability management. They discuss the transformative Better Health transaction and how it shapes future leverage market trends. The conversation highlights the evolution of capital structures and the vital role of strategic communication amid financial restructuring. The duo also explores the intricacies of navigating Chapter 11 amidst economic uncertainties, shedding light on the necessity for clear communication in complex situations.
AI Snips
Chapters
Transcript
Episode notes
LME Origins
- The term "LME" (Liability Management Exercise) became prominent after J.Crew's restructuring, led by David Nemesaki.
- Frequent use of LMEs led to specialized terminology like "up tiers" and "drop downs".
LME Strategy Shift
- The LME landscape shifted from "loan-to-own" strategies to proactive capital structure adjustments.
- Creditors now prioritize extending runways and improving terms instead of taking ownership.
Private Credit's New Role
- Private credit funds are increasingly collaborating with sponsors and public companies on LMEs.
- Their focus has shifted from "loan-to-own" to being part of the solution and protecting their investments.