Distressed exchange offers are uncommon transactions, and I can’t name one off the top of my head in the past decade. The Wall Street Journal reports that Tupperware launched its offer to buy back bonds trading around 35 cents on the dollar for 45% or 42% of par.
That’s quick and easy money for the investor and a great deal for the company if it has sufficient liquidity. Tupperware’s Form 8-K indicates the company will be talking to certain institutional noteholders about a distressed exchange offer.
I have no doubt we’ll see more distressed tender and exchange offers this year. Now would be the best time for you and your team to become familiar with or refresh your recollections about the look and feel of this type of transaction.
About the Author: Peter Chapman is the CEO and Editorial Director of Beard Group, Inc.