American Teleconferencing Services: IIQ 2022 Update

9/12/2022: This is embarrassing: we still don’t really know what’s happening with American Teleconferencing Services Inc (AFS), a subsidiary of Premiere Global Services (PGi). We’ve written extensively about both companies in the past, and communicated on these pages that there was much trouble afoot. The BDC Credit Reporter has written 4 times about AFS alone – most recently on August 31, 2021.

What we do know from the valuations by the multiple BDCs that hold the AFS and PGi debt is that this has been a disaster for lenders. The outstandings at both related companies amounted as of June 30, 2022 to $125mn, but the value totals only $7mn. Despite most of the exposure being “first lien”, the ultimate outcome should be an almost complete loss – one of the worst in recent memory based on the dollars and the multiple BDCs involved.

As a reminder, the BDCs involved are Capital Southwest (CSWC); Cion Investment (CION); Oxford Square Capital (OXSQ); Main Street Capital (MAIN); PennantPark Floating Rate (PFLT); SLR Investment (SLRC) and two non-traded players.

We continue to rate the company CCR 5, given the non accruals that date back to 2019. Furthermore – and more than most troubled companies that we track – we expect there will be no meaningful recovery and – at some point – over ($100mn) of realized losses will be booked. The damage, though, has been done. As noted, the exposure has been all but written off and no income is being produced.