Global Liability Management Quarterly: Optimum Raises Pref. Equity at ‘Unsub Topco’; Cable One Launches Ticking Offer; Antolin Banks Drive Priority Shift; Synthomer Lenders Uptier; KWG’s Offshore Restructuring Hands Creditors Mostly Equity

In our second-quarter 2026 global quarterly report highlighting our work on liability management exercises, or LMEs, used by stressed creditors to partially refinance capital structures, Octus discusses the latest developments in Optimum Communications’ deal away, Cable One’s attempt to rush a coercive exchange, Grupo Antolin’s coercive bank-led restructuring proposal, Synthomer lenders’ uptier and collateral grab and KWG’s offshore restructuring.

This report summarizes the latest trends in liability management, including “aggressive” transactions completed or contemplated by U.S., European and Asian borrowers during the second quarter that, among other things, raise cash, extend maturities or reduce outstanding principal and sometimes all three.

The report concludes with a table summarizing select aggressive U.S. LME transactions covered by Octus during the quarter, which are also now available on Credit Cloud HERE. Aggressive LMEs involving, for example, uptiering and drop-downs have been more common in the U.S. market and were relatively limited in Europe, until last year, after a slew of transactions including Selecta and Altice International. In recent months, banks’ desire to protect capital has seen them proactively drive deals, taking advantage of loose documents and the need of issuers to retain banks for operational support. Banks have leveraged this relationship in the bank group-led uptier with Synthomer and the restructuring proposal led by Antolin banks and family shareholders.

Meanwhile, in China/Asia, the real estate sector has been a hotbed of LME activity as the industry continues to struggle.

In our special RX101 European LME series, we explored the evolving landscape for LMEs across Europe. With insights sourced directly from leading local counsel, the series breaks down the legal tools, restructuring tactics and cultural norms shaping how debtors approach LMEs in seven key jurisdictions: England, France, Germany, Italy, Luxembourg, the Netherlands and Spain.

Octus’ RX 101 on LMEs and “creditor-on-creditor violence” is HERE. Octus’ LME 101 covering double-dip transactions is HERE, and our RX 101 on basic themes of directors’ duties across key European jurisdictions is HERE. Octus’ RX 101 on LMEs in Europe is HERE. A summary of key European LMEs in 2025 is HERE.
 

• Optimum Communications: Optimum Communications raised $300 million in new money by selling Series A preferred equity at an unrestricted subsidiary, CSC Investments II LLC, or “Unsub Topco,” which indirectly holds the company’s East region and Lightpath assets, with proceeds to be used to fund a tender offer for an equivalent amount of its stock. It also announced it was exchanging common stock held by founder Patrick Drahi for Series A preferred equity.
   
• Cable One: Cable One launched a unique exchange offer for Mega Broadband, or MBI, lenders, where the terms varied based on how quickly lenders elected to participate. Early participants were to receive a mix of cash and first-out term loans at par, while later participants were slated to receive second-out term loans at par. The strategy aimed to create urgency and leverage in negotiations with creditors, but lenders organized against it and the company has disclosed that it is considering its right not to consummate the exchange.
   
• Antolin:Grupo Antolín proposed a restructuring plan for approximately €1.27 billion of its debt. The plan presents creditors with two choices: a default option that reinstates debt at par with a 2035 maturity, or a voluntary option offering a 32.5% haircut on bond principal in exchange for structurally superior debt with a higher cash-pay coupon. A group of bondholders has initiated legal action in the London High Court, contending that this structure violates the pari passu treatment of bank debt and bondholders, with banks elevating working capital facilities to super senior status while nonparticipating banks avoided haircuts.
   
• Synthomer: Synthomer refinanced its €300 million revolving credit facility and UK Export Finance, or UKEF, facilities into new secured debt maturing in February 2029. By utilizing permitted lien capacity and designating certain U.S. subsidiaries as unrestricted, Synthomer refinanced this bank debt with senior secured debt that gained collateral support. While the company’s €350 million senior unsecured notes due May 2029 remain unamended, they are now structurally subordinated to the newly secured facilities.
   
• KWG Group Holdings: KWG Group Holdings’ proposed restructuring of about $4.833 billion of defaulted offshore debt is a near-complete equitization, and it launched with thin creditor support by an ad hoc group holding over 26.1% of the debt. Under Option 1, a creditor exchanges each $100 of claims for $29 of notes tied to The Corniche at Ap Lei Chau, a Hong Kong luxury residential project, and $20 of mandatory convertible bonds, or MCBs. Option 2 converts 100% of a holder’s claim into two-year MCBs. None of the new instruments pays a cash coupon.

Seeking Consensual, Comprehensive Restructuring Optimum Raises Preferred Equity at Unrestricted Subsidiary to Fund Common Equity Tender
 

In early June, Optimum Communications disclosed a number of balance-sheet initiatives and transactions, which served to move further value away from the CSC Holdings restricted group, which is the issuer of a vast majority of the company’s debt. These actions followed a November 2025 unsub transaction when Optimum moved substantially all of its East region assets out of the restricted group and raised new debt against those assets.

The company disclosed it issued an aggregate of approximately $512.4 million of “Unsub Topco” Series A preferred equity, $300 million of which was sold in a private placement to institutional investors in exchange for new money. The remaining $212.4 million was issued in a private exchange offer for Optimum common equity, with $200 million of the new preferred being issued to entities controlled by Drahi, Optimum’s founder and member of the board of directors, with $12.4 million issued to other Optimum management and board members.

The company further disclosed that CSC Investments II LLC, or “Unsub Topco,” is the parent company of the unrestricted subsidiary that holds the company’s East region assets.

The company also announced that it had transferred the entity that holds its 50.01% ownership of Lightpath, which had been an unrestricted subsidiary since 2020, to a new unrestricted subsidiary that sits below Unsub Topco.
 

With Optimum expected to start negotiations with an ad hoc group of co-op creditors, the company appears to be seeking a position of strength by insulating its East business operationally and financially from CSC Holdings where the vast majority of its debt sits, while locking in a certain level of recovery for Optimum shareholders. In the event that the two sides are not able to reach a deal, the measures Optimum has taken may minimize the impact on its assets and operations and preserve value.

The company also disclosed financial information, including subscribers, revenue and adjusted EBITDA attributable to its CSC Holdings restricted group, as well as its new UnsubTopco unrestricted group. According to its first-quarter 2026 press release, the East region segment generates the majority of Optimum’s EBITDA at about 60.8% of the total on a trailing 12-month basis. Lightpath contributed another 8.9% bringing the Unsub Topco group total to $2.31 billion, or about 69.7% of the trailing 12-month EBITDA.

In early July, the company announced that its unrestricted subsidiaries Cablevision Litchfield LLC and CSC Optimum Holdings LLC entered into a credit agreement amendment to draw an incremental $250 million on its Unsub Topco term loan with the intention to use the proceeds for general corporate purposes. The company also announced that it intended to complete its tender offer for Optimum’s common shares on July 7, disclosing it had accepted and would repurchase 120 million of Optimum’s Class A common shares for a total of $300 million, excluding fees and expenses.

Cable One Launches Limited Time Offer for Mega Broadband Term Lenders, Two-Thirds of Which Join Co-Op Against the Deal
 

On June 22, Cable One commenced an exchange offer for MBI’s existing term loan in connection with its pending acquisition of the 55% of MBI that it doesn’t already own. The exchange offer was launched with a short period to participate, with the early deadline at 3 p.m. ET on the same day of the announcement and the final expiry the next day.

Most importantly, the exchange offer rewarded speed as until 50% of the tranche had tendered, those accepting the offer would swap their existing holdings at par into new first lien, first-out, or FLFO, debt at Cable One, each capped at 25.005% of the total amount outstanding of MBI term loans. Other lenders who accept the offer would be paid in new first lien, second-out term loans.

In any event, the offer did not have the desired effect, as on June 22, lenders holding well over a majority of Mega Broadband’s term loans were signing a cooperation agreement rejecting the company’s proposed coercive exchange offer and seeking to negotiate better terms for the lenders. The agreement was prepared by Milbank and was open to all term lenders to join with the firm hosting a call later that afternoon.

The morning of June 23, the company announced it had received irrevocable lender acceptances reflecting about 33.4% of all outstanding senior secured term loans as of 5 p.m. ET the night before. As the acceptees made up less than 50.01% of the total lenders, it would appear they would receive the FLFO and cash option described above if the company proceeds with the tender. As of June 24, we reported that the co-op group had grown to over 65% of all MBI term lenders.

In early July, we reported that Cable One and its advisor JPMorgan were telling prospective new financing providers that it was no longer going forward with its proposed exchange and was in the market to raise a second-out facility to finance the purchase of the 55% stake in MBI. The company later disclosed it was considering its right not to consummate the MBI term loan exchange offer.

Even as it was unsuccessful in this instance, this creative and coercive par exchange offer expands the issuers’ tool box in the face of pervasive creditor united fronts in the current LME era. Tying speed to consideration adds to existing coercive tactics including exit consents and transacting creditor exclusivity and exemplifies the tug of war between debtors and their creditors in gaining negotiating leverage when a capital structure falls into distress.

The Cable One proposal was the second time this year that speed played a major role in determining what economics lenders would receive as CDK Global lenders received an email from lenders counsel in April discussing signing a co-op agreement where only the first signees up to a 13.5% cap would be able to get “initial party” status.

Antolin Bank Lenders Drive Restructuring Proposal Leaving Bondholders to Decide Between Discount or Moving to Bottom of Waterfall
 

Spanish automotive interiors supplier Grupo Antolín-Irausa SAU entered into a restructuring support agreement, or RSA, on June 24 with its main relationship banks to restructure its capital structure through a Spanish restructuring plan, extending maturities to 2030 or later and replacing an uncommitted factoring line with a new super senior working capital facility with €220 million committed.

As of July 9, the RSA had been signed by lenders holding about 79.4% of senior facilities agreement commitments and 80% of ICO facility commitments, but noteholder support stood at just 6.4% of the 2028 notes and 4.7% of the 2030 notes by aggregate principal amount.

A bondholder SteerCo representing more than 25% of the bonds and advised by Alvarez & Marsal, Milbank and Cuatrecasas has instead built a co-op agreement now covering about 66% of bondholders, and on July 14 launched legal action in the High Court in London against the company, Deutsche Trustee Co. as notes trustee and Deutsche Bank as senior facility agent, arguing the deal breaches the pari passu treatment of bonds and bank debt under an English law-governed intercreditor agreement.

Affected creditors choose between two treatments:

Alternative 1, the default, reinstates bank debt and both note series at par, maturing Dec. 31, 2035, with a 6.97% coupon and includes two new covenants: minimum liquidity of €200 million and net leverage capped at 25% headroom above the company’s own business plan.

Alternative 2, voluntary, exchanges the 2028 and 2030 notes for new notes at 67.5% of face value, maturing Dec. 31, 2030, with an 8.28% coupon stepping up 200 bps annually from June 2027, and 30 months of call protection. Bank lenders electing Alternative 2 are reinstated at par into a new facility maturing August 2032 at Euribor+2.50%, ratcheting down as leverage improves, but take on a pro-rata obligation to fund the new €220 million working capital facility, which BBVA backstops up to €205 million.

Under Alternative 2, the intercreditor waterfall is the point of contention. Enforcement proceeds first repay the working capital facility, then the first €435 million goes exclusively to Alternative 2 instrument holders, and only the remainder is shared pari passu across all senior secured creditors. Alternative 1 creditors get second-ranking pledges over certain subsidiaries; Alternative 2 creditors get first-ranking pledges over key subsidiaries and intercompany loans, while Alternative 1 creditors sit behind them as second ranking. Bondholders who take the haircut therefore improve their structural position relative to those who don’t, a design the SteerCo calls discriminatory given notes and bank debt currently rank pari passu.

Our Restructuring Analysis is HERE.

Synthomer Refinances Unsecured RCF and UK Export Loans as Secured Debt, Subordinating €350 Million Bond
 

British speciality chemicals group Synthomer plc announced on April 30, alongside its full-year 2025 results, that it had refinanced its €300 million multicurrency revolving credit facility and its €287.5 million and $230 million UKEF facilities, extending maturities to February 2029 from July and October 2027 respectively and relaxing financial covenants. As part of the transaction, Synthomer redesignated its U.S. subsidiaries as unrestricted and granted the RCF and UKEF lenders a comprehensive security and guarantee package, elevating that debt to senior secured status ahead of the unsecured notes.

Synthomer is a U.K.-listed producer of specialty polymers across coatings, construction, adhesives and health and protection end markets. The group’s leverage problems trace to two debt-funded acquisitions: the $455 million purchase of Omnova Solutions in April 2020, and the $1 billion acquisition of Eastman Adhesive Resins in April 2022 at a peak-cycle valuation of 10.3x EBITDA, agreed just as pandemic-era nitrile glove demand, which had briefly pushed EBITDA to £341 million in 2021, was normalizing.

EBITDA fell 58% to £142 million in 2022, covenant leverage peaked at 5.5x in the first half of 2023, and the group has needed successive covenant amendments since, alongside a £276 million rights issue and roughly £260 million of noncore disposals including William Blythe in May 2025.

By early 2026, the group’s entire senior capital structure, the RCF, the UKEF facilities and the €350 million 2029 notes, sat pari passu with no secured or structurally senior debt ahead of any class. A bondholder group hired Milbank in March amid concern that an amend-and-extend of the bank facilities, due in the second half of 2027, would come at the cost of subordinating the notes; the bonds had already fallen to 64.2 from the high 80s at the start of the year on that concern.

Key Terms

The refinanced RCF and UKEF facilities carry a stepped net debt-to-EBITDA covenant of 6.25x for 2026, tightening to 5.25x in 2027 and 4.25x in 2028, first tested Sept. 30, 2026, plus a monthly minimum liquidity covenant. Lenders also receive a 1.25% exit fee with partial equity-settlement options. The €350 million SUNs due May 2029 remain outstanding on unchanged terms but rank behind the newly secured debt.

Our Recovery Analysis is HERE.

KWG Restructuring Hands Creditors Mostly Equity
 

Cayman Islands-incorporated, Hong Kong-listed Chinese property developer KWG Group Holdings Ltd. announced on June 15 that it had entered into an RSA, with initial participating creditors – members of an ad hoc group representing more than 26.1% of the aggregate outstanding principal of its in-scope offshore debt.

The company said that it is inviting all other holders to accede to the RSA ahead of two consent-fee deadlines: an early deadline of 5 p.m. Hong Kong time on July 13 and a base deadline of 5 p.m. Hong Kong time on July 27. KWG intends to implement the restructuring through a scheme of arrangement in Hong Kong and/or the Cayman Islands.

The restructuring addresses $4.833 billion in-scope debt: $3.956 billion senior notes, $380 million syndicated bank loans and $497 million other loan facilities borrowed or guaranteed by the company. The senior notes span nine New York law-governed series with coupons ranging from 5.875% to 7.875% and maturities from September 2023 to January 2027 – most long past due – alongside a Hong Kong law-syndicated loan and 11 “Private Debt” facilities lettered A through K.

Background

KWG Group Holdings is a Cayman Islands-incorporated, Hong Kong-listed (stock code 1813) property developer controlled by the founding Kong family. Kong Jianmin is chairman.

The company first restructured its offshore debts in September 2022, when KWG conducted an exchange offer and consent solicitation. It now joins a wave of second-round, debt-equitization-heavy offshore restructurings by Chinese real estate developers.

The offshore notes are issued by KWG and guaranteed by subsidiary guarantors. Routing recovery through an orphan vehicle and a single Hong Kong project reflects the limited offshore asset base typically available to creditors of defaulted Chinese developers, whose onshore residual value – if any after a multiyear downturn since at least 2021 – has been difficult to access offshore.

Key Restructuring Terms

Scheme creditors choose between two options (details HERE):
 

• Option 1, capped at $1.38 billion principal, converts each $100 of claims into $29 of zero-coupon ALC Notes – backed solely by KWG’s 50% interest in one Hong Kong project, Ap Lei Chau, and ultimately convertible into project-SPV equity rather than listed shares – plus $20 of mandatory convertible bonds, or MCBs, canceling the remaining $51.
   
• Option 2, the default, converts 100% of principal into MCBs, which convert into KWG shares at HKD 1.55 (July 6 price: HKD 0.11). All accrued interest is waived at closing.
   

The economics are heavily equitized and cash-light: None of the new instruments pays a coupon, and cash recovery on the ALC Notes depends entirely on one project’s residual free cash flow. The structure also favors the controlling shareholder – 27% of creditors’ MCBs are redirected to Chairman Kong Jianmin, whose family injects just $10 million-plus of the up-to-$17.15 million rights issue that supplies the only new money. Consent fees are nominal: 0.2% for early accession by July 13, 0.1% by July 27, with both paid in notes.

Analytical Context

The economics are demanding for creditors. Option 1 returns only $49 of new instruments per $100 of claims – and even that $49 is not cash: the $29 of ALC Notes pays no coupon and ultimately converts into equity of a single-project SPV, while the $20 of MCBs converts into listed KWG shares. Option 2, the default, is a 100% conversion into two-year MCBs. With all three new instruments zero-coupon, creditors receive no cash, and cash recovery on the ALC Notes depends entirely on FCF from the Ap Lei Chau project – a 50%-owned Hong Kong joint venture sitting behind a project-level senior facility – swept through a waterfall that first repays the ALC Senior Notes.

Several features tilt value toward the controlling shareholder. The shareholding structure stability arrangement redirects 27% of creditors’ MCB entitlement to the chairman, while the chairman’s $10 million-plus rights-issue contribution is modest against a $4.833 billion claim pool and is itself converted into equity. The MCB conversion price of HKD 1.55 and the chairman’s HKD 2.12 lock-up-release threshold imply a recovery thesis resting on a substantial re-rating of KWG’s equity – a highly uncertain proposition given the share price in early July 2026.

The immediate gating item is participation. The RSA was signed by creditors holding just more than 26.1% of in-scope debt, well short of the majorities a Hong Kong scheme requires – typically 75% by value in each class. The two-tier consent fee – 0.2% for early accession and 0.1% thereafter, both paid in illiquid zero-coupon notes rather than cash – is a thin inducement, and building support across nine note series plus more than a dozen bank and private facilities will be the main test of whether the restructuring reaches its scheme meeting and sanction before the undisclosed longstop date.

Q2 Liability Management Transactions in North America

Select second-quarter out-of-court liability management transactions in North America are summarized in the table below and available for download HERE and also now on Credit Cloud HERE. This list includes all transactions that Octus is aware of having closed in the second quarter.