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Multi-Color Creditors’ Advisors to Become Restricted in Preparation for Debt Talks
Advisors to Multi-Color Corp. creditors will soon sign nondisclosure agreements to prepare for confidential debt restructuring talks with the company, according to sources.
An ad hoc group of Multi-Color secured creditors is working with Milbank as legal advisor and PJT Partners as investment bank in light of the company’s deteriorating financial performance, Octus reported. The Clayton Dubilier & Rice-backed company is seeking advice from Kirkland & Ellis as legal advisor and Evercore as financial advisor to evaluate options for its balance sheet, as reported.
The label manufacturer’s second-quarter adjusted EBITDA dropped 15% year over year on a 5% revenue decline, as reported. The generally defensive labeling and packaging sector has experienced a halt in its momentum because of post-pandemic inventory reductions and ongoing macroeconomic challenges.
The company was downgraded to CCC+ from B- last month by S&P Global Ratings, which cited a slowdown in demand, the ratings agency’s expectation for weaker volumes, and a greater cash flow and refinancing risk.
Octus on Aug. 7 updated its private company analysis of Multi-Color. Octus also hosted a webinar on June 17 to discuss Multi-Color’s financial trajectory, the challenges in the labeling and packaging sector, and potential strategies for capital structure management.
An estimate of the company’s capital structure as of Dec. 31 is shown below:
The 8.625% secured notes due 2031 last traded in size at 72 today, according to TRACE. The dollar-denominated term loan due 2028 was indicated at 78.78/80.87, according to Solve. CLO lenders to Multi-Color Corp. can be found HERE. The CLOs with the most exposure to Multi-Color are in the chart below:
Multi-Color, sponsor CD&R, Milbank and PJT Partners did not respond to requests for comment.
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