The Distressed Debt Report - June 21, 2006

Decision Against 'Substantive Consolidation' Protects Secured Lenders

The Supreme Court’s decision last month not to review a ruling in Owens Corning’s bankruptcy case may help protect secured lenders from an increasingly common argument that unsecured lenders are making for larger claims in reorganizations. Full Story

$850M Credit Facility to Repurchase Bank's Private Equity Stake

Bank of America Securities helped arrange a $750 million term loan facility and $100 million revolver for Cumulus Media. The credit line—large enough for Cumulus to lever up to almost 9x its annual EBITDA—will be used in part to repurchase stock held by Bank of America private equity funds. Full Story

The Greenwich-Van Global Hedge Fund Index declined 0.51% in May. But Greenwich-Van Advisors’ sub-index that tracks distressed funds rose 2.52%. according to Wade McKnight, a vice president at Greenwich-Van Advisors in Nashville, Tenn. Likewise, hedge fund advisor Hennessee Group’s main index declined 1.15% in May. But Hennessee’s sub-index that tracks distressed funds rose 1.68%. Full Story

• Some Companies Use 2nd Liens to 'Buy Time,' Jefferies Banker Says
• Law Firm Kirkland Names New Restructuring Head
• Apollo's, KKR's Weak IPO Performance Leads P.E. Firms to Reconsider Offerings
• Morgan Stanley Raises $1B for Fund of Funds
• Allied Capital to Repurchase Options
• Greenhill Acquires Canada's Beaufort Partners
• UCC's D'Loren Gaining $550M Balance Sheet With Merger
• NexBank Acquires Middle Market Restructuring Firm Barrier
• CIT, Piper Jaffray Among Lenders of up to $745M for American Medical
• CIT Group Names EVP of Human Resources

Bank of America arranged $850 million in debt financing for radio broadcaster Cumulus Media, CIT Healthcare provided most of a $745 million facility for American Medical Systems Holdings, and Merrill Lynch helped arrange $400 million for telecommunications company PAETEC Corp. in some of the biggest recent middle market debt financing deals. Full Story