17.09.2020

Maxim in bond buy back

US based rental company Maxim Crane Works has launched a cash offer to repurchase up to $125 million worth of its 10.125 percent Second Priority Senior Secured Notes which otherwise mature in 2024.

The offer will remain open through October 13th unless extended or closed early. Bond holders who tender their notes prior to the ‘early tender’ date of September 29th will benefit from a premium of $30 per $1,000 worth of notes tendered, plus accrued and unpaid interest. The price will set through a ‘modified Dutch Auction’ procedure based on the lowest single bid price at which the company will be able to purchase the notes.

Maxim sold the $545 million worth of the bonds in 2016 when the market was unstable and as a result it paid over the odds in terms of interest rate. The premature retirement of these bonds alone will save the company around $12 million a year in interest.
In June Moody's Investors Service downgraded its rating of Maxim’s notes from B2 to B3 due to concerns about rental rates and utilisation suffering during the pandemic, while it also expected further ‘bolt on’ acquisitions would erode further dividend payments. This is likely to help the company receive some attractive offers to sell bids.