Cloud 9fin

Jane Komsky, a distressed legal analyst, discusses the rising trend of cooperation agreements among creditors with Max Frumes, head of distressed and restructuring. They tackle the fine line between collaboration and anti-competition. The duo draws parallels to the American Needle case against the NFL, questioning if these agreements violate the Sherman Act. Their conversation dives deep into the power dynamics, legal challenges, and implications for distressed companies in the face of these evolving strategies.

This discussion features Shubham Saharan, a senior reporter focused on private credit, and David Brooke, the US private credit editor with extensive expertise in the field. They delve into the rising prominence of synthetic PIKs in a high-interest-rate environment. The duo unpacks the flexibility and unique risks of these financial tools, their implications for borrowers and lenders, and the importance of clear reporting standards. Listeners will gain insights on whether synthetic PIKs are fleeting trends or here to stay in private credit markets.

Dr. Edward Altman, a renowned financial metrics researcher and creator of the Altman Z-Score, dives into the intriguing world of zombie companies—organizations that persist despite financial distress. He discusses how these firms misallocate resources, impede competition, and contribute to economic stagnation. With examples like Alitalia, Altman highlights the impact of government policies and interest rate subsidies that keep these non-viable entities afloat. The emergence of zombie companies in countries like Australia and Canada further emphasizes the global reach of this troubling trend.

The podcast dives into Paramount Global's staggering $13 billion debt and its potential downgrade to junk status. With the streaming wars heating up, experts discuss Paramount's liquidity position and possible acquisition by Skydance. They explore the media landscape's evolving financial strategies, cost-cutting measures, and the tension between traditional TV and streaming profitability. The conversation also touches on potential mergers that could reshape the industry, inviting listeners to consider the future of media.

Join leveraged finance reporter Ryan Daniel and senior private credit reporter Synne Johnsson as they dive into the resurgence of private credit strategies, blending nostalgia with innovation. They discuss the rise of hybrid deals and junior debt facilities, exploring how sponsors can maximize leverage through dual tranche structures. The conversation reveals the strategic advantages of private credit over syndicated markets and contemplates the future, linking current trends to lessons from past financial crises.

In this engaging discussion, private credit reporter Peter Benson and senior reporter Shubham Saharan dive into the rising interest of hedge funds in the private credit market, attracted by potential higher returns. They unpack the challenges hedge funds face in this competitive landscape, including skepticism from investors and tough fundraising conditions. The conversation also highlights the contrast between hedge funds and traditional private credit players, exploring the evolving dynamics and promising opportunities in this financial arena.

Private credit fundraising faces new challenges as high interest rates shift investor focus to established fund managers. Amidst this transition, niche strategies are on the rise, with innovative fund launches in asset-based and specialty finance. The podcast discusses key differences between US and European private credit landscapes, notably regarding ESG regulations. Additionally, the emergence of perpetual capital and customized investment structures signals a dynamic evolution, hinting at a potential recovery in the sector.

The Supreme Court in a 5-4 decision on 27 June ruled that a bankruptcy court does not have the statutory authority to provide non-consensual third party releases. Such releases had been a crucial part of the Purdue Pharma Chapter 11 plan, among others, where the bankruptcy system was being employed to shield non-debtors from litigation without full creditor consent.The decision coincided with the timely publication of Unjust Debts by UNC law professor Melissa Jacoby, which provides a critical history of how the use of Chapter 11 has expanded far beyond the initial scope laid out in the Bankruptcy Code enacted in 1978.For this week's episode of Cloud 9fin, global head of distressed and restructuring Max Frumes discusses this refreshing and crucial snapshot of bankruptcy law that is both technical and accessible with Professor Jacoby, and how current events might further shape the bankruptcy courts around the country.

Max Frumes, global head of distressed and restructuring, Jane Komsky, a distressed legal analyst, and Sami Vukelj, a private credit reporter, dive into the evolving landscape of liability management in distressed firms. They reveal how recent transactions, like those involving Pluralsight and AMC Entertainment, are allowing broader lender participation in recovery efforts. The trio discusses the shift towards more collaborative restructuring methods and the ongoing challenges borrowers face amid rising interest rates, shedding light on innovative financial strategies in turbulent times.

US leveraged buyout volumes are slowly starting to improve, with the likes of Apollo, Thoma Bravo, CD&R and TowerBrook making moves. This comes after a long period where buyers and sellers struggled to find common ground in valuations and could bring a welcome shot of new debt issuance for investors that are eager to lend. So what changed? And is this improvement in deal activity significant enough to satisfy investor demand for paper?In this week’s episode of Cloud 9fin — recorded before the recent spike in market volatility — US LevFin editor David Bell sits down with senior reporter Sasha Padbidri and credit analyst Alec Keblish to unpack the hottest themes of recent LBO activity.