The Distressed Debt Report - April 22, 2008

BDCs Turn to Rights Offerings to Raise Capital

The depressed stock prices of many business development companies (BDCs) have placed them in the unusual position of having to raise new equity capital at prices below book value.

As capital is raised through transferable rights offerings, analysts are debating whether the opportunities in middle market company debt are lucrative enough to justify the dilution to the BDCs' shareholders.

Small Banks Struggling Under Weight of Loans

Since the subprime mortgage implosion triggered the credit market collapse last summer, regulators and politicians have scrutinized and criticized the large Wall Street banks that have written down tens of billions of dollars in securities tied to subprime debt. Smaller community and regional banks largely escaped the spotlight. But not anymore. Full Story

Deal Would Include Quick Sale of Hedge Fund’s Assets

Troubled asset-based lender SageCrest was negotiating as of last week for a refinancing package from Fortress Investment Group that could lead to a quick sale of SageCrest's assets. The deal may save SageCrest from defaulting on its current loans. Full Story

AirTran’s, Sun Country’s Finances May be Tenuous

When airlines used to go into Chapter 11 bankruptcy protection, service would continue uninterrupted as the companies restructured. But with oil prices at more than $100 per barrel, that's all changed. Full Story

• CIT Group Selling Assets
• Zwirn Awaits Decision to Name Receiver for Radio Stations
• Sun Capital Rejiggers Fund for Distressed Market
• BDO Consulting Stakes Out CRO Roles
• Apollo Global Management Files to Go Public
• Wornick Gets Approval for Reorganization Disclosure Statement
• Wellman Closing in on Bankruptcy Auction
• Movie Gallery Ready to Exit Bankruptcy