(Bloomberg) — American Securities-backed LaserShip Inc. reached a debt-restructuring deal with some creditors that would provide fresh money, reduce debt and revamp the repayment line in the latest such proposal by distressed debtors.
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Under the plan, the struggling package-delivery company would receive around $300 million that would rank higher in the repayment line than existing loans, according to people with knowledge of the situation who asked not to identified discussing a private matter.
The new loan would mature in 2029 and have a margin 6.25 percentage points over the Secured Overnight Financing Rate, some of the people added.
The deal also calls for a below-par debt exchange in which all secured creditors of LaserShip can swap into a mix of senior- and junior-ranking debt, the people said.
Those that brokered the transaction would receive a larger chunk of the higher-ranking obligations. First-lien lenders who didn’t negotiate the deal would be able swap about half of their holdings for second-priority loans and the rest for third-priority debt at around 75 cents on the dollar, the people said.
Current second-lien holders could receive third-priority debt at 70 cents, the people said. They added that nonconsenting lenders would fall to the end of the repayment line.
Restructuring deals that offer sweeter terms for select creditors have grown more popular in recent months as companies with loose credit agreements negotiate with investors eager to improve their returns. Recent restructuring proposals from flooring firm Empire Today and container freight provider STG Logistics Inc. have come with similar provisions.
The people said LaserShip also has the option to make in-kind interest payments, which allow borrowers to cover obligations with even more debt.
Messages left with LaserShip were not returned and a representative with American Securities declined to comment.
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