Packers Lenders Sign Cooperation Agreement

A group of lenders to Packers Sanitation Services has signed a cooperation agreement ahead of the company’s $54 million revolving credit facility maturing in 2026, according to sources.

The move by the majority lenders, led by Elliott Investment Management, comes after the company raised $275 million of financing through a distressed debt exchange, as reported by Octus.

S&P Global Ratings upgraded the company’s credit rating to CCC from SD in January, stating that the transaction provided a six-month reprieve to the company. The upgrade followed a downgrade by Moody’s Investors Service on account of “the economic losses incurred by the lenders of the unsecured notes, as well as PSSI’s inability to fund its interest burden given weak operating performance, very high debt load, weak liquidity with large cash burn, and looming maturity for its revolver.”

The Blackstone-owned company in December last year moved Safe Foods, the antimicrobial solutions business, away from its lenders’ collateral pool, Octus reported.

The Tennessee-based slaughterhouse cleaning company lost cash after several of its clients canceled business contracts in the wake of the U.S. Department of Labor penalizing the company for employing children at one of its facilities in 2023.

An estimate of the company’s capital structure is below:
 

The company’s $1.3 billion first lien term loan due March 2029 was indicated today at 58/59, according to Solve.

A list of CLO lenders can be found HERE.

Packers and Blackstone did not respond to requests for comment.