The Distressed Debt Report - March 13, 2007

Subprime Mortgage Bust May Presage Wave of Commercial Defaults

As Willem Sels, chief credit strategist for the Dresdner Kleinwort investment bank tells it, the middle market collateralized loan obligation is in roughly the same position today as the beloved fairy tale character Goldlilocks was just before the three bears returned to their cottage. Which is to say, things are about to get dangerous. Just how dangerous depends upon who is telling the story. Full Story

‘PIK Toggle’ Features May be Creeping into Middle Market

Debt terms that allow companies to decide when they want to pay interest, a relatively new feature for the large-cap sector, may be starting to creep into the middle market. Full Story

Judge Unwilling to Release P.E. Firm Calera From Liability

A U.S. bankruptcy judge in Delaware rejected a proposed agreement between second lien debtholders and the private equity owner of Nellson Nutraceutical that would have released P.E. firm Calera Capital from legal liabilities. Full Story

• Allied Capital Writes Down Value of BLX
• JP Morgan Starts Subordinated Lending Unit
• American Capital Starts Distressed Investment Group
• Highland Capital Raises $244M With Closed-End Fund
• Well-Known Attorney Returns to Weil Gotshal
• Burkle to Take Control of Bankrupt Allied Holdings
• Werner Bankruptcy Auction Delayed by Objections
• Newport, Credit Suisse to take Control of Bankrupt Amtrol
• Law Firm Raids Competitor for N.J. Bankruptcy Lawyers

WestLB, Mizuho Arrange $325M for Pacific Ethanol

Wachovia Capital Markets, Goldman Sachs Credit Partners, Morgan Stanley Senior Funding, and GE Capital Markets completed the arrangement of a $960 million credit facility for local newspaper publisher GateHouse Media. Full Story