Arini Capital Management and Silver Point Capital are reportedly advocating for a preferential position for their claims within Altice International's debt stack. This move comes as Altice International faces increasing pressure from creditors after controversially transferring significant assets, specifically its Portuguese and Dominican Republic operations, out of the reach of lenders. These assets represented approximately 80% of the company's earnings, and their removal has triggered a default notice from a group of creditors.
Altice International's actions, which included designating Altice Portugal SA and Altice Caribbean Sarl as "unrestricted subsidiaries" and raising new debt against Altice Portugal, have significantly weakened the security held by its existing lenders. The company's bonds saw a substantial decline following these announcements, with senior secured bonds dropping 6 to 8 points and subordinated bonds falling more than 16 points. This has led to speculation about potential litigation and a battle for control among various creditor groups.
The push for debt priority by Arini and Silver Point highlights the growing tensions between Altice International and its creditors, who are concerned about the company's efforts to deleverage through aggressive tactics. The situation is reminiscent of an earlier, albeit less aggressive, asset transfer by Altice France, but the Luxembourg incorporation of Altice International may offer fewer protections for creditors. Lenders, including Sona Asset Management, PGIM, and BlackRock, have formed a steering committee and entered a cooperation agreement to address the situation, while junior creditors, led by GoldenTree Asset Management, are also organizing. Altice International has an estimated $8.6 billion in net debt, with about $3 billion maturing in 2027.
