đ„Johnny's Links #4đ„
Inflation + Liability Management + Sable Offshore Corp. ($SOC) + AMC Entertainment Holdings Inc. ($AMC)
Weâre now into Week 4 of this little experiment where Johnny gets to show off his curated links (previous editions here, here and here). LFG!
đWhat Weâre Reading (4 Reads)đ
1. Inflation (Short Reaching the Fedâs 2% Target). Here is Lazard Incâs ($LAZ) CEO and Chairman Peter Orszag showing he has absolutely no rizz and being party pooper AF about inflation. The TLDR? This:
âThe consensus view among forecasters is that inflation will continue its gradual descent toward the Federal Reserveâs 2 percent target through 2026. Similarly, market pricing suggests investors believe the Fed has largely won its inflation battle.
In our view, however, this optimism is premature. We think it is more likely that inflation will surprise to the upside â potentially exceeding 4 percent by the end of 2026. The core drivers are the lagged effects of tariffs, an expansion in the fiscal deficit (which could exceed 7 percent of GDP this year), a tighter labor market reflecting the effects of the shift in immigration policy, monetary policy that is looser than commonly appreciated, and inflationary expectations that are drifting upwards. We believe these factors outweigh the downwardâpressure trends that consensus has been fixated onânamely, the ongoing decline in housing inflation and gains in productivity.â
Remember: thereâs going to be a Fed transition to a President Trump-favored Chairman in just a few months and Trump unequivocally and unabashedly demands lower rates. This is going to be one hell of an interesting year for the Fed, đż.
2. Liability Management Exercises (Short Losers). Youâve got to be part of the ad hoc group yâall or youâre otherwise set up to hang out with the geeks lawyers at Glenn Agre Bergman & Fuentes strategizing over how to handle an imminent and savage lien-strippage. Here Bloomberg reports on Stonepeak Partners-owned Rinchem, a chemical logistics and services company that, in connection with an acquisition of DuprĂ© Logistics, seeks to raise new money, capture discount on an outstanding term loan, extend debt maturity, and f*ck holdouts all at the same time. And here we thought weâd read somewhere that LMEs were getting friendlier, đ€·ââïž.
Since weâre on the topic of LMEs, we recommend you check out Axar Capitalâs â2026 Market Outlookâ if youâre looking for a good lunch read later today.
Stating that â26 is ââŠlikely to mark the transition to the next [post-LME] chapter,â Axar ââŠexpect[s] a higher incidence of hard defaults and comprehensive restructurings, especially within the broadly syndicated loan marketâ becauseââŠearlier LMEs often consumed remaining flexibility, shrinking or eliminating basket capacity, tightening documentation, and raising voting thresholds for credit agreement amendments. As a result, additional extensions are often prohibitively difficult to execute. In practice, sponsors typically have one opportunity to pursue a solution without providing additional equity capital. Thereafter, direct sponsor equity is required, or the company typically faces a restructuring. Many middle market companies will be at this crossroad in 2026.â
Which is a longer way of saying that many LMEs accomplish utter f*ck all.
If you want to read an even longer way of saying that many LMEs accomplish utter f*ck all, you can give this paper a gander:
Or if you just want the shorter version of the longer way of saying that many LMEs accomplish utter f*ck all, you can read this FT article about the đ paper. Hereâs the upshot:
âResearch by Mark Roe of Harvard Law School and Vasile Rotaru of the University of Oxford shows that more than 80 per cent of 89 LME transactions executed in recent years defaulted on their debts within 36 months, including many resorting to a formal bankruptcy.
The academics argue that those bankruptcies should have been pursued in the first instance, with the business and its employees harmed by the underlying problems not being proactively fixed, even if that meant creditors and shareholders took an upfront hit.â[T]he âavoid bankruptcyâ rationale crashes into a brute fact: half of the purportedly successful LMEs end up in bankruptcy anyway, and those bankruptcies tend to be longer and more contentious than for non-LME filers,â Roe and Rotaru write in a forthcoming paper.ââ
The article does cite a number of thus-far-successful LMEs like Chewy Inc. ($CHWY), Carvana Inc. ($CVNA) and EchoStar Corp. ($SATS), all of which demonstrate that, despite the robust failure rate, LMEs are often worth a go. They donât call it âplaying out an optionâ for nothing:
Ducera Partners LLCâs Michael Kramer, for one, doesnât think LMEs are slowing down anytime soon.
3. Oil & Gas (Long Shortsellers). Hunterbrook is at it again, indicating that Sable Offshore Corp. ($SOC) is f***********cked.
4. Movies (Long Adam Aronâs Survival Instincts). AMC Entertainment Holdings Inc. ($AMC), the movie theater operator that seems to be perpetually in a state of balance sheet triage, announced that it had reached an agreement with certain holders of its Muvico LLC senior secured notes due in 2029 to ⊠whatever ⊠do stuff ⊠read for yourself ⊠this is a links newsletter, folks, câmon. The company also released preliminary Q4â25 and FYâ25 results. The former sucked: total revenue âŹïž and adjusted EBITDA âŹïž. On the bright side â and, yes, weâre stretching here â the companyâs net loss improved over Q4â24, to $(127.4)mm versus $(135.6)mm, đ. The latter wasnât much better, though total revenues and adjusted EBITDA did âŹïž. But, âNet loss for the full year ended December 31, 2025, to be approximately $(632.4) million compared to a net loss of $(352.6) million for the full years ended December 31, 2024.â Holy hell thatâs bad. Looking for additional bright sides, the box office is, as of January 29, 2026, trending 8.5% ahead of â25 â and thatâs inclusive of last weekâs snowmaggedon shuttering people indoors. Ever optimistic, CEO Adam Aron cited some big upcoming releases as cause for optimism: Spiderman Brand New Day, Avengers Doomsday, Moana, Dune Part III and The Odyssey. Johnny would love to hit the theater and see a good movie because Lord knows Netflix Inc. ($NFLX) movies suck. This might explain a bit why đ:
Finally, have you been wondering whatever happened to AMCâs foray into ⊠*checks notes to make sure this is actually real* ⊠oh sh*t ⊠it is ⊠oh sh*t, we blocked this out of our minds ⊠gold! Well, guess who is getting the last laugh:
Indeed.
đŒWhat Weâre WatchingđŒ
An amusing vid on five franchises that always fail:
đResourcesđ
We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. đ„You can find it heređ„.