S&P is not happy that Isagenix Intl LLC has bought back $65mn of its $375mn term loan at a discount, and given the company a D rating. The discount was said to be substantial.
We know less than we’d like to: such as which term loan is involved and which lenders were involved ? Nonetheless, this is a reminder that 5 BDCs have $34.5mn in exposure to the company – all in the 2025 term loan. At year-end 2020, the positions were valued at discounts that ranged from (28%) to (45%).
Isagenix is rated CCR 4, and some $2.3mn of investment income is involved. We last wrote about the company on August 28, 2020 when the principals of the business injected new capital. At the time, we concluded: “Maybe this capital infusion will be what it takes to return Isagenix to the ranks of normal performance“. Based on the latest valuation discount that does not seem to have been the case and material losses – of both capital and income – seem likely.
We’ll learn more in the days and weeks ahead – and whether some BDCs have crystallized some or all of their losses. The BDC Credit Reporter will return to Isagenix once we have more information.