Cloud 9fin Lycra stretches out for private credit
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Nov 25, 2024 Stakeholders face tough choices as Lycra navigates a complex balance sheet while considering a private credit option. The podcast delves into the strategic dynamics of financing in tight markets, where private credit is becoming increasingly appealing. Listeners learn about the intricate negotiations and conflicts among bondholders and financial players involved in restructuring. Additionally, it highlights the risks and challenges of refinancing, showcasing the changing landscape of private credit that adapts to current economic pressures.
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Private Credit in Distressed Companies
- Private credit firms are increasingly investing in struggling companies like PlayPower and Pure Fishing.
- These investments often deviate from typical private credit sectors like healthcare and tech.
Bondholder Surprise
- Lycra's bondholders were surprised by the private credit deal, finding it illogical.
- They argue it only refinances some debt without addressing the larger capital structure.
Lycra's Debt Strategy
- Lycra aimed to use private credit to address its most senior debt and near-term maturities.
- This strategy prioritized immediate needs while potentially leaving other debt unresolved.