Harrah’s: The 8-K May Signal a Significant Change in the Debt Structure (July 3, 2008)
Covenant Review predicted the first Harrah's exchange offer four months before it happened. In this report we mapped out which indenture and credit agreement loopholes would be used and how. When the exchange offer was launched in November 2008, we published another report explaining how Harrah's was already planning a second exchange offer, and that happened in March 2009.
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TXU: Exchange Offer Possibilities (March 6, 2009)
When TXU told investors in March 2009 that it was not planning an exchange offer, Covenant Review was skeptical. We responded by mapping out how TXU could launch exchange offers on the Oncor and TCEH sides of the business. TXU launched the exchange in October 2009 and we published another report explaining why bondholders should reject the offer; the vast majority of bondholders said no.
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Clear Channel: The Maintenance Covenant Is Very Flexible and Near-Term Breach Should Not Be Assumed (February 26, 2009)
In early 2009, various Street analysts were ringing the alarm too early for a Clear Channel covenant breach. We explained why the emerging conventional view was wrong. The resulting trade - buy the cheap legacy bonds because just a few coupon payments would be a break-even and then all upside beyond that - was a winner.
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Omnicare Covenant Review (May 28, 2010)
In a Covenant Review, we summarize the covenant issues that investors ask us about the most. We comment on the strengths and loopholes of the covenants in absolute terms, and relative to the real business risks and the place in the capital structure occupied by each bondholder.
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"The Not-So-Secured Side of Second Liens", in High Yield Report (January 29, 2007)
Covenant Review explained the many defects embedded in "secured" bonds of the 2005-2006 vintage. In 2009-2010, investors have continued to trade coupon for the apparent safety of collateral in too many deals where that protection has little real value.
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