RAX TL B 1L US 11/03/2023

Rackspace Hosting Inc

Credit, TMT


Publicly traded companies mentioned herein: N/A

Highlights

The presenter is short Rackspace Inc’s unsecured bonds, funded with the term loans for a 2.5 point cash spread. The debt stack is about 5.5x, but 4x through the term loan, so the unsecured is relatively thin. He believes their main business segment, managed hosting and private cloud, is impaired and potentially a zero over time. If recent trends soften - and continue to decline over time, the company’s bond could be driven down into the mid-to-high 80s from 94, with some optionality around a disaster quarter driving them into the low 80s. 

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

  • Signing up and creating account with us unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Request access to DeMatteo Research for full access

Request Access

Already have an account?

Idea Discussion

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Commentor 1 - 2 weeks ago

Signing up and creating account with us, unlocks this content for you. Contact us today for full access to DeMatteo Research and more.

Idea Discussions display submitted commentary from our investor community.

To read and participate in the discussion with the presenter and investor base, request access to DeMatteo

Request Access

Already have an account?

An error occurred loading this content. Try again later or contact us.