(Bloomberg) — The lenders to British debt collector Lowell are seeking better terms as part of a deal that would see the company extend its maturities and get fresh cash from its bondholders.
The creditors exposed to a revolving credit facility want an improvement to some of the conditions put forward by the company, according to people familiar with the matter, who asked not to be identified because the process is confidential. They include banks, but also funds Alinor Capital and Värde Partners on a sub-participation basis, some of the people said.
Discussions are ongoing between the creditors, the company and bondholders who support the transaction. The company needs the backing of the revolving credit facility lenders to implement a consensual transaction, Lowell said in a statement on Jan. 24. The debt collector is backed by the private equity firm Permira.
In December, Lowell reached agreement with some bondholders to extend the maturity of its notes by three years, while repaying some of them in cash and reinstating another part as payment-in-kind debt. The company was supported by investors including BlackRock Inc. and Invesco Ltd.
In January it won the backing of its largest creditor, Arini Capital Management, by adding €250 million of new money to the proposal. The fresh cash will be provided by bondholders.
As part of the deal, the revolving credit facility would see its maturity extended to August 2028. While the collateral package and the covenants would be improved, the deal would preserve the same pricing and other terms, according to a presentation by Lowell.
Lowell had been in talks for months with its bondholders on how to address its nearing maturities with the help of advisers PJT Partners Inc. and Goldman Sachs Group Inc.
Spokespeople for Lowell and Alinor Capital declined to comment. Värde Partners didn’t immediately respond to a request for comment.
The challenging backdrop for debt collectors has also prompted other overly leveraged companies to overhaul their capital structures. Intrum AB, based in Sweden, has also undergone a debt restructuring, while creditor Arrow Global took over iQera Group.
–With assistance from Libby Cherry.
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