At Home Group Inc., a leading home décor and furniture retailer in a liability management transaction that significantly enhanced the company’s liquidity and de-levered its balance sheet. The transactions included an uptier exchange of approximately 90% of its existing $500 million of senior unsecured bonds into new secured high yield bonds with a two year PIK option at a 10% discount to par, resulting in cash interest savings of approximately $71 million. Participating holders also provided their pro rata share of $200 million secured new money high yield bonds that were issued through an unprecedented “double-dip” structure that effectively allowed such creditors two claims for par recovery on the same collateral (i.e. in a 50 cent recovery for secured creditors, these lenders would receive 100 cents), greatly reducing the cost of the new money.
