The Wall Street Journal reports the lenders to Travelport Worldwide Inc. are close to a deal with the company and sponsor Elliott Management wherein the former would agree not to trigger a default under their debt agreements till September 15, 2020. Bankers and borrower are arguing about how the sponsor allegedly transferred assets that should have been maintained in the company to serve as collateral for another entity’s loan. The owners of Travelport Worldwide have argued that if a default occurs, the company would be forced into bankruptcy.
Very much involved – and worried- is one non-traded BDC : GSO-Blackstone which has $97.9mn invested at cost in the company’s first lien debt due in 2026. As of March 31, 2020, the debt was discounted (31%) to $67.9mn. Some ($6mn) of annual investment income is at risk of interruption if a default does occur.
The BDC Credit Reporter downgraded the company to CCR 4 from CCR 2 after the IQ 2020 results came out, and has added the name to the Weakest Links list, as a default still seems likely to these skeptical eyes. This one credit alone has increased the aggregate cost all Watch List assets by nearly a tenth.
There will be likely be many more twists and turns where Travelport Worldwide is concerned as all the parties are taking a hard line approach and there are billions of dollars at risk. We’ll check back when the next dramatic development occurs.