Footprint Acquisition LLC (doing business as Footprint Retail Services) was founded in 1990 and “performs best-in-class sales, merchandising, installation, logistics and remodel services in retail stores across the United States”. That does not sound like a business that would perform well under current conditions, with so many retailers impacted by the pandemic. We’re guessing that’s why the only BDC with exposure – PhenixFIN (PFX) – placed its preferred investment in the company on non accrual from the IVQ 2020 and discounted the $4.0mn in exposure by 50%.
As of September 30, 2021, Footprint remains non performing, but the value has increased to $3.0mn, and the trend is improving. Besides the ($1mn) unrealized loss in value, PFX is missing out on $0.350mn in annual income from the preferred position, which yields 8.75%.
The public record and PFX’s filings are very short on information, but the improving valuation gives us some comfort. For the moment, though, Footprint is rated CCR 5. However, we’re hopeful that when IVQ 2021 results are published, we may see an increase in valuation. Or even – though unlikely – a return to performing status, even if in PIK form.