The Distressed Debt Report - July 24, 2007

Pangaea Pays Wide Spreads to Complete CLO Offer

Last week saw a significant sign that the turbulence in the bond market over the last few weeks has leaked into the middle market. Pangaea Asset Management's first collateralized loan obligation priced on July 19 at spreads that blew out to a whooping 16.5 basis points wider than where they were marketed, on average for all of the security classes. Full Story

'It All Starts With Denial'

S. Douglas Hopkins, president of the Parsippany, N.J., turnaround specialist Kestrel Consulting, has seen a lot of changes in his more than 25 years helping distressed companies get out of trouble. But one thing never changes. “It all starts with denial,” Hopkins said. "The turnaround consultant has to find a way to overcome that denial."

While the problems in the subprime mortgage and high-yield debt markets have so far been kept largely contained to those areas, sources report anecdotal evidence of the cracks extending into the middle markets. Full Story

• Market Players Say They’re Seeing More Fraud
• Appellate Court Limits Equitable Subordination Claims
• Dura Rights Offering Opposed by Sub Debtholders
• U.N., Trade Group to Promote International Lending Standards
• Chapter 11 for Oasys Mobile
• Clearwire Puts $1B Loan to Work with Sprint Nextel