DON’T. MESS. WITH. DAISY. CHAPTER 5. (LONG ASSET STRIPPING AND COERCIVE CONSENT SOLICITATIONS).
It's a beautiful day. You're walking down the street with your cute little puppy, Bacca, enjoying some much-needed serenity. The wind is blowing your hair back and the smell of flowers permeates the air. Life is good. You’re happy. Maybe you'll treat sweet lil' Bacca to some of that sweet organic sh*t today; after all, you're only a short walk to the local pet store. But then your phone rings.
"Bro. We need to make a decision."
"About what?" you ask, your chill vibes violently crushed by the voice of your excited junior analyst.
"PetSmart. They're doing an exchange. And it's coercive AF!"
Frikken Petsmart. You look down at Bacca and you swear you see a grimace on his cute little face as he stares back at you. You refocus your attention on your analyst, "Alright dude. Relax. What's the story?"
"Arnold & Porter Kaye Scholer is hosting an all hands term lender call soon. At issue is whether the group of term lenders will, in exchange for some enhanced economics, amend the credit docs governing the loan to post facto bless the company's absurd Chewy.com dividend."
You reflect a bit on Petsmart as you continue your walk. Nearly exactly two years ago the company announced its whopper of a $3.35b Chewy.com transaction; it took on massive amounts of debt to fund the deal. It was the largest e-commerce acquisition ever — topping Walmart Inc’s acquisition of Jet.com. Venture capitalists instantaneously made a boatload of money (the pre-acquisition funding topped out at $451mm) but immediately the Petsmart capital structure looked wobbly after a two-part debt offering of (a) $1.35 billion of ‘25 8.875% senior secured notes and (b) $650 million of ‘25 5.875% unsecured notes. Rounding out the capital structure was a $750 million ABL, a $4.3 billion cov-lite first-lien term loan and $1.9 billion of cov-lite ‘23 senior unsecured notes. The company’s leverage ratio was approximately 8.5x.
You then reflect on June 2018. You recall reading this in PETITION:
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