CTI Food Holdings: Exits Bankruptcy

On May 7, 2019 huge food distributor CTI Foods Holdings emerged from Chapter 11, after a short stay that began less than 2 months before. In addition, the company announced the arrangement of a new $110mn Revolver to fund post-bankruptcy operations. For the 3 BDCs with $37mn in debt exposure to CTI Foods, this will result in likely booking of Realized Losses in the IIQ 2019 results. There is $28mn of second lien debt from FSK, CCT II and Guggenheim Credit Income Fund which will be written off as part of the restructuring. Apparently, CTI Foods is shedding $400mn in debt to become viable after many months of deteriorating performance in 2018. Less clear is what happens going forward to first lien and secured DIP financing (advanced in the IQ 2019 to help the transition) outstanding. For the BDC Reporter’s Views on this credit, and for further details, see the Company File.