ACALTLD TL B 1L USD

Academy Sports 7/15 Cov-Lite TLB 01 Jul '22

Credit, Consumer


Publicly traded companies mentioned herein: Foot Locker Inc (FL)

Highlights

The presenter is long Academy Sports July 2022 term loans, which he finds attractive at the current mid-50 price level. The security had traded within the 65 – 75 range for years but traded up to the mid-80 range prior to the outbreak of COVID-19 on the back of a strong H2’19. Per his estimates, investors can create the business at a low-2x multiple at the current market value. If the company can continue avoiding store closures, he expects Academy Sports to generate a ~10% levered FCF yield to the term loan at face value or a ~20% levered FCF yield at market value with little risk due to a strong balance sheet and strong inventory valuation if liquidation is needed. 

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Idea Discussion

Commentor 1 - 2 weeks ago

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