In the IIQ 2022, Bain Capital Specialty Finance (BCSF) placed its three different first lien loans to Ansira Holdings Inc. on non accrual. Much earlier – back in the IQ 2020 Crescent Capital (CCAP had placed its debt to related entity Ansira Partners, LLC on non accrual as well. All these loans, and those held by New Mountain Finance (NMFC) , Goldman Sachs BDC (GSBD)and non-traded Audax Capital mature in December 2024. Interestingly, the different lenders apply very different discounts to value their debt holdings, with CCAP discounting (21%) and BCSF (47%), and all sorts of variations in-between.
We had already rated Ansira CCR 5 because of CCAP, so there’s no change associated with BCSF’s decision. However, the move does confirm that the digital marketing agency continues to have serious problems even now that Covid has largely ceased to impact the economy. Total BDC exposure is Major (i.e. over $100mn) at a cost of $108mn. The current FMV totals $71mn – a serious write-down for senior debt. Total investment income at risk is around ($9mn), some of which is already not accruing according to BCSF and CCAP.
What ails Ansira ? You’re not going to get any “color” from the BDC lenders involved. Even when BCSF – on its IIQ 2022 conference call – admitted the debt had been placed on non accrual, the borrower was not even named. (We worked out who was involved by looking at the footnotes in the 10-Q).
The public record is not much use either. The only relevant item we’ve discovered is an encouraging press release from the company itself (what could be more objective ?), dated August 16, 2022. Here’s a highlight:
“In the first and second quarters the company welcomed more than 10 new brands to its client roster, hosted two client events to share thought leadership and connect cross-industry peers, began to roll out enhanced reporting for its website platform, and continued to receive third-party industry accolades for its work and technology.
“Supply chain challenges and chip shortages, compounded by inflation, continue to impact many of our client verticals but our team has proven to thrive under this downward pressure, reacting by innovating and refining our solutions and services,” said Ansira President and Chief Revenue Officer Andy Arnold. “We are constantly finding ways, both big and small, to help clients at the enterprise level, and at the last mile of customer engagement, to drive demand and retention.”Ansira Partners Press Release – August 16, 2022
How does this all end for Ansira and its BDC lenders ? Notwithstanding the non accruals and big discounts taken, we’re not ready to presume a realized loss is a given. This is a large business with a diversified book of business and a deep pocketed sponsor in Advent International. We will just have to keep track of developments as best we can.
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