AMERICAS DISTRESS DAILY: Quest Creates ‘3.5-Tier’ Loan

Clearlake Capital Group-backed Quest Software is shuffling the order that its creditors get repaid for the second time in three months.

• As part of its latest debt exchange, owners of the company’s fifth-priority paper — currently last to get paid among loan holders should the company go under — could swap into a newly created ‘3.5-out’ term loan via a below-par exchange, according to people with knowledge of the situation.
• Quest received $350 million of fresh cash in May, a deal that pushed numerous creditors back in the repayment-priority line.

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• The share of private credit borrowers ...