Wesco Can’t Use Debt Swap to Boost Payment Room: Covenant Review

Sept. 13, 2021, 7:53 PM

Wesco Aircraft Holdings wouldn’t be able to use a debt-to-equity swap to increase its capacity to make restricted payments, such as a dividend to its sponsor, according to a note from Covenant Review.

Amid market speculation that sponsor Platinum Equity has purchased bonds of the troubled aerospace supplier at a discount, investors have wondered whether it could undertake a debt-for-equity exchange and increase its restricted payment capacity by using the “build-up basket” or restricted payments carve out, the research firm said in a Sept. 13 note.

Wesco would likely be able to use the build-up basket through proceeds from a ...

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