9/16/2022: We are busy bringing up to date as many Company Files of underperforming BDC-financed businesses as we can. That involves – in part – circling back to our BDC Credit Reporter archives and seeing what has happened to companies we’ve written about in the past and filling in the multiple fields in the Company Files. It’s exhausting work, but is generating many interesting credit stories.
The latest is Monitronics International Inc. (aka Brinks Home), which has been on one BDCs books or another since 2012 according to Advantage Data’s records. Now the only lender is FS KKR Capital (FSK), but with what we call Major exposure of $119mn. (Anything over $100mn at cost gets the Major label). Admittedly, all the invested capital is in first lien debt and all performing.
Nonetheless, we have rated Monitronics CCR 3 – the first step down into being an underperformer on our 5 point scale. Please find attached the updated Company File – which includes the multiple BDC Credit Reporter articles we’ve written on this subject over the years, and much more data besides.
Here is what we wrote in our Credit Notes, where we summarize in the Company File our latest thoughts:
9/16/2022: There is a very long and complex history to the Monitronics/Brinks Home story and to the BDC involvement therein. Basically the company was highly leveraged, restructured itself in a pre-packaged bankruptcy which only increased its BDC exposure in late 2019. Since then valuations – at least – have recovered, until the last couple of quarters. The business needs new capital but failed to raise new high yield monies last year and is still on the hunt. This may become a problem credit again for FSK, which inherited this name from FSKR. The amounts involved are Major (over $100mn) so it’s worth paying attention.
See Company File