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Distressed Debt Investing-Revlon Consumer Products Corp

 

We like Revlon bonds at 6 cents on the dollar.

Revlon has filed for Chapter 11 bankruptcy. Revlon listed assets of $2.3 billion and debts of $3.7 billion. A debtor in possession (DIP) of $575 million has been set up.

Revlon has great brand awareness and should exit bankruptcy as a leaner consumer beauty products company.

We suggest investors review the bankruptcy information as it unfolds to determine the value of the company's unsecured debt.

 

                                                                                                                    

Revlon Consumer Products Corp:

$450 Million- Senior Unsecured Notes

                                                                                                  

6.25 % -Maturity- 8/01/2024-  Price 6

 

 

 

Stephen P. Vlahos

Performance Plus Advisors, Inc.

 

 

Distressed Debt and High Yield Research-J.C. Penny Company

                                                J.C. Penny Company, Inc.

 

                               The Law of Large Numbers-Spending to Prosperity

 We suggest that distressed debt and yield hungry investors take a look at the junk bond debt of J.C. Penny with the belief that eventually this old line retailer can get a break and turn it's situation around. J.C. Penny debt has sold off due to the many uncertainties regarding their ability to turn the company right side up. A Chapter 11 Bankruptcy does not seem to be in the cards in the immediate future but is possible.

We feel out sized returns could be available for investors with a short to medium time horizon. Bonds maturing in less than seven years are:

Short Term High Yield J.C. Penny Debt

$500 million   5.875 due 7/1/23  (Senior Secured)                price 83        

$400 million   8.625 due 3/15/25                                         price 51.5

 

 

Stephen P. Vlahos

Performance Plus Advisors. Inc.

 

 

 

 

 

Distressed Debt Research-Hostess Brands, Inc.

 

                      Hostess Brands, Inc.

                        Where's The Cake?

Hostess Brands, Inc., the maker of Twinkies and Wonder Bread filed Chapter 11 Bankruptcy protection in Janurary 2012. This is the second trip to bankruptcy court for this company in less than ten years (Chapter 22). Interstate Bakeries originally filed for bankruptcy protection in 2004 and emerged from in 2009 (See attached research reports).

Hostess has 565 distribution centers, 570 stores, 5500 delivery routes and 33 bakeries. Brands include: Twinkies, Ho Hos, Sno Balls, Donettes, Ring Dings, Ding Dongs, Drakes, Wonder Bread, Natures Pride, Dolly Madison, Butternut, Home Pride and Merita.

After giving unions, debtors and lenders a last chance to try to work issues out, the Hostess judge approved the liquidation of Hostess Brands, Inc., costing thousands of jobs.

Someone will likely produce Twinkies again. The brands, bakeries, distribution network and workers are valuable. The company was unhealthy not necessarily the food. The hostess liquidation should attract hungry buyers both strategic and private equity or distressed debt  investors looking for this companies venerable brands, without the baggage from the unions and old bakeries and dated equipment.

The DIP lenders have agreed to allow the Company access to the original $75 million to fund the sale and wind down.

 

Stephen P. Vlahos

 

Research is provided by Performance Plus Advisors, Inc. To obtain research on Hostess Brands or any other company that we follow contact us at 727-441-1305 ext 201

Download Interstateredated10-06-04

 

Download Interstatereportdated02-16-05

 

 

 

Distressed Debt Research-Eastman Kodak Co.

 

 

                         Eastman Kodak Co.

 

                                  A Kodak Moment

 

On 1/18/2012 Eastman Kodak Co. filed for Chapter 11 Bankruptcy.

The most important factor effecting the recovery for distressed debt investors and traders that hold Kodak bonds will be the outcome of the sale of its digital imaging patent portfolio. What irony, the technology that Kodak created is what caused its demise.

Kodak plans on using the bankruptcy process to monetize its digital imaging patent portfolio via a Section 363 sale.

Below the first lien super priority Dip, currently $450 million, there is $750 million of second lien debt:

 $500 million 9 3/4 due 3/1/18      price  92

 $250 million 10 5/8 due 3/15/19  price  92

We expect a recovery for distressed debt investors, which will include pre and post petition interest, of approximetely 115. Our opinion is based on the senior position these securities have in Eastman Kodak's capital structure, and expect a full recovery for this claim.

 

For more information on the Eastman Kodak bankruptcy or any other company we follow contact  Performance Plus Advisors, Inc.

727-441-1305 ext 201

 

Stephen P. Vlahos

 

Download EASTMAN KODAK COMPANY (Buy)-5

 

Download Eastman Kodak Company-1-4 

 

Related articles

Kodak agrees to exit bankruptcy

Eastman Kodak To Exit Bankruptcy In September: Judge

An Eastman Kodak Moment: Approval to Exit Bankruptcy [Video]

Distressed Debt Investing- A &P

                                      The Great Atlantic & Pacific Tea Co. Inc.

                                     A & P

 

A & P's parent The Great Atlantic & Pacific Tea Co. Inc., filed Chapter 11 Bankruptcy on 12/12/10. Great Atlantic & Pacific is an operator of supermarkets, combination food and drug stores and discount food stores in 8 states with 395 stores. The company operates in three major reporting segments; Fresh, Pathmark and Gourmet.

The Tengelman group owns 39 % of the company and Yucaipa Companies, notably Ron Burkle, own 28 %, if preferred stock they own were to be converted to common. Mr Burkle is thought to have bought a significant amount of A & P's senior debt in the past few months leading up to the bankruptcy filing.

A & P has faced increased competition from mass merchandisers, warehouse clubs, drug stores, dollar stores and convenience stores. The company has a high level of legacy obligations including " dark store" leases that A & P has been unable to fully assign, sublease, or terminate. A & P has struggled with unfavorable supply, services and logistics contracts.    A & P is also party to collective bargaining agreements which require significant pension and health care related contributions. 

The Bankruptcy Court has approved a $800 million Dip facility. The Dip facility is secured by the collateral securing the pre petition Senior Credit Facility plus unencumbered property, including non residential real property leases. The Company will have $200 million in cash available through a new term loan, and $450 million in additional borrowing capacity.

A & P Capital Structure

The 11.375 % senior secured notes due 8/4/15, have a secondary lien, guaranteed by all of   A & P's domestic subsidiaries. The senior position of these notes in the company's capital structure should make these securities very attractive to distressed debt investors.

There are four series of unsecured notes.

• 5.125 conv. senior notes due 6/15/11
• 9.125 sr. notes due 12/15/11
• 6.75 conv. sr notes due 6/15/12
• 9.375 notes due 8/1/39

 

Research on distressed debt securities is provided by Performance Plus Advisors, Inc. To receive a research report on Great Atlantic & Pacific or any other company we follow contact us at 727-441-1305 ext 203.

 

Stephen P. Vlahos

 

 

Download A & P Distressed Debt Research 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blockbuster-Distressed Debt Investing

                                                                Blockbusted

 

 

Much has been written about how poorly Blockbuster has addressed the digital age and how successful everyone else is. Performance expectations for Blockbuster are very low. Blockbuster has expanded its mail rentals, rolled out 7000 NCR kiosks, and has valuable store offerings such as the Comcast and TIVO ventures.

Blockbuster filed for Chapter 11 Bankruptcy protection on September 23, 2010. The company plans to reduce its $900 million in debt to $350 million and close 500-800 stores. Blockbuster will try and differentiate itself from its competitors, as the only company to provide customers with multiple ways to rent movies, with access to 125,000 titles.

Most professionals agree DVD sales will peak in 2012. Streaming and on demand will continue to grow. Movies will be watched on TV and computers. Content will be delivered from the networks and studios to a dozen different vendors. Content will be available from everyone.

Blockbuster has a major advantage over competition, with an exclusive arrangement with the studios to get first run releases 28 days earlier than its competitors. Several studios including Universal, Warner and Fox, which represent over 50% of new releases, have granted Blockbuster this 28 day advantage to rent new releases.

                          Senior Secured Notes

The 11.75% Senior Secured Notes, currently trading at 48 cents on the dollar, will be converted to stock. These notes are senior secured obligations and are guaranteed by Blockbuster's domestic subsidiaries. The vast majority of the 11.75% debt is held by Icahn Associates and other distressed debt investors.

                           Unsecured Creditors

At this time, unsecured creditors are expected to receive 3% of the new Blockbuster when its emerges from Chapter 11 Bankruptcy in the form of warrants. The Blockbuster 9% notes due in 2012 are considered in this class.

 

Research on distressed debt securities is provided by Performance Plus Advisors, Inc. To receive a research report on Blockbuster or any other company we follow contact us at 727-441-1305 ext 203.

 

Stephen P. Vlahos

 

 

 

  Download Blockbusted Distressed Debt Research-3

 

Download Blockbuster Eating Crow Distressed Debt Reaearch-5-5

 

 

Distressed Debt Investing- Blockbuster, Inc.

   

   Blockbuster Bonds- "Sizzle and Steak"

Distressed debt investors and traders will find "sizzle and steak" in the distressed debt securities of Blockbuster. Blockbuster bonds trade at prices that indicate its restructuring efforts will fail and the video rental chain will go out of business.

  

The Steak

Blockbuster has $610 million remaining of senior 11.75 percent notes, due in 2014. These senior secured notes currently trading at 65 have traded in a range of 60-75 cents on the dollar this year. We expect this debt to be reinstated and or refinanced under either a refinancing scenario or a chapter 11 proceeding. These notes are secured by collateral including DVD's and part of Blockbuster's foreign units.

The Sizzle

Blockbuster has $300 million of 9 percent subordinated notes, due 2012. These notes currently trading at 7 cents on the dollar contain "all of the risk" in a Blockbuster restructuring. It will be challenging to provide a clear picture of the future outcome for the holders of the 9 % notes.

It looks like a pre arranged bankruptcy filing is coming. On July 1, 2010 holders of 70% of the outstanding principal of the 11.75 % senior secured notes and Blockbuster entered into a Forbearance Agreement with respect to amortization and interest payments. Blockbuster has engaged restructuring advisors at investment bank Rothschild and has hired law firm Weil, Gotshal & Manges, prominent bankruptcy attorneys.

  

  

Performance Plus Advisors, Inc provides distressed debt research for Bids4bonds.com. To obtain a research report on Blockbuster, Inc- contact Stephen Vlahos (727)-441-1305 ext 203.

Stephen P. Vlahos

 

Download Blockbuster Distressed Debt Research

 

Download Blockbuster Eating Crow Distressed Debt Reaearch-5-5

Distressed Debt Research Report-Interstate Bakeries

10/06/04 Buy 6% convertible debt at 85-- Return 20%-- Holding period 3 months. 

Download Interstatereportdated02-16-05

Distressed debt investors had to move quickly on this one. Barron's ran a story on Interstate Bakeries after it filed for chapter 11 bankruptcy and the bonds went on a tear.

Stephen P. Vlahos