AG Kings Holdings: IIQ 2019 Write-Downs

Judging by the write-downs taken by its two BDC lenders in the IIQ 2019 results, troubled supermarket chain AG Kings Holdings continues to deteriorate. Somewhat late in the day – as reported previouslyWhite Horse Finance (WHF) placed the senior debt owned on non accrual and discounted the value by (14%), versus (9%) previously. Capital Southwest (CSWC), which had the debt on non accrual since the end of 2018, admitted on its Conference Call that the company was now rated 4 on its -14 internal scale:

We did reduce AG Kings to a 4 this quarter, making it the only investment rated a 4 in the credit portfolio. The investment is our first and only non accrual among the investments made since launching our credit strategy 4.5 years ago“.

That’s pretty much all we learned that’s new but with this descending trend, the $17.7mn of remaining FMV (cost $20.2mn) may be in for further cuts unless we hear good news to the contrary. The company is rated CCR 5, but not yet in Chapter 11. That could change.