NORLIF TL 1L USD

TNT Crane and Rigging, Inc.

Credit, Industrial/Transportation, Event Driven/Special Sit


Publicly traded companies mentioned herein: Apollo Global Management Inc (APO), Dow Inc (DOW), Exxon Mobil Corp (XOM), H&E Equipment Services Inc (HEES), United Rentals Inc (URI)

Highlights

The presenter is long TNT Crane first lien loans due November 2020 (NORLIF TL 1L USD). TNT Crane, which was acquired by First Reserve in 2013, is a top five crane rental company in the US. The company owns mostly mobile cranes that can be driven on highways and around the country to high demand locations; ~70% of its business is maintenance and repair work for petrochemical, power plant, and refinery markets, and it services blue chip companies (e.g., Dow, Exxon) in a space with high barriers to entry. The presenter notes that TNT is overlevered and must restructure. More immediately, however, the company has a revolver due in January 2020. These two issues have caused its first lien papers to trade down from the low- to mid-90 range to current low-80 levels, but the presenter is confident that these two issues will be resolved. Once the company solves these issues and creates a more attractive balance sheet, the presenter finds it likely that the first lien loans create the proforma company (based on EBITDA valuations of public comps) that includes more recent acquisitions. 

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Idea Discussion

Commentor 1 - 2 weeks ago

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