Glossary: Financial Terms

Stressed Debt:
Yielding < Barclays HY+ 200bps subject to technical and macroeconomic conditions, asset valuation, liquidity runway, credit metrics.

Distressed Debt:
Yielding ≥ Barclays HY+ 200bps subject to technical and macroeconomic conditions, asset valuation, liquidity runway, credit metrics

Pre-Restructuring:
Defaulted or negotiating a restructuring

1. Appointment of financial/restructuring advisors in view of restructuring
2. Commencing negotiations with creditors
3. Interest / Amortization / Maturity payment default (with the exception of extension of grace period by Trustee)
4. Declaration of Event of Default (technical or otherwise)

CH11-Restructuring:
Bankrupt/Insolvent or discounted exchange terms agreed in principle

1. Companies remain in database for a minimum of 24 months from the completion of exchange/restructuring

Post Restructuring:
Any company that has been restructured during the last two years. We track these situations looking for capital markets and M&A activity.

Primary Issuance:
Primary Issuance tracks new high yield bond and syndicated leveraged loan deals above USD 150m beginning in July 2009. The data only includes USD denominated debt for companies domiciled in North America, with speculative grade ratings from both S&P and Moody’s. The information is derived from a combination of Debtwire reporting, US Securities and Exchange Commission documents and company press releases.

Lev. Loan:
Issuer rating < Moody’s Baa3 or S&P’s BBB-, capital structure contains at least USD 300m of loans, minimum 4x total leverage

High Yield:
Capital Structure contains USD 200m of bonds, minimum 4x total leverage

Debt Maturity:
Taken from our balance sheet analysis, a list of all significant (>$100m) debt maturities during the next 18 months from the universe of stressed through post restructuring companies (does not include all High Yield)

Advisor Levels:
Levels are attached to advisors that reflect their seniority. Financial advisors: Level 1:MDs; Level 2:Directors; Level 3:Team Leaders; Level 4:Others. Legal advisors: Lever 1:Partners; Level 2:Others. All other advisors: Level 1 only.

Trigger Event Date:
Approximate date of event which caused the company to file for Chapter 11 bankruptcy protection or seek a financial restructuring of its balance sheet

Bankruptcy Filing (Announced) Date:
Date of a company’s bankruptcy filing or formal announcement date of a financial restructuring process

Agreement in Principle Date:
Approximate date which debtor and creditors have agreed to the terms of a financial restructuring or Plan of Restructuring under a Chapter 11 process

Proposal (POR Filing) Date:
Filing date for the first Plan of Restructuring under the Chapter 11 bankruptcy process

Proposal (POR) Final Date:
Confirmation date for the final Plan of Restructuring under the Chapter 11 bankruptcy process

Completion (Effective) Date:
Date of emergence from Chapter 11 bankruptcy proceedings or the completion date of the financial restructuring


Deal Type

Court Driven-Restructuring:
Restructuring process conducted under Chapter 11 bankruptcy proceedings

Court Driven-Liquidation:
Liquidation process conducted under Chapter 11 or Chapter 7 bankruptcy proceedings

Out of Court-Restructuring:
Restructuring process conducted outside Chapter 11 bankruptcy proceedings

Out of Court-Liquidation:
Liquidation process conducted outside Chapter 11 or Chapter 7 bankruptcy proceedings


Type Nomination

CCAA:
Companies’ Creditors Arrangement Act; the Canadian Federal Act which governs bankruptcy proceedings

Chapter 11:
Chapter 11 of the United States bankruptcy code which permits the debtor to reorganize the corporation

Chapter 11, section 363:
Section 363 under Chapter 11 of the United States bankruptcy code which allows the debtor to sell assets of the estate outside the ordinary course of business

Chapter 7:
Chapter 7 of the United States bankruptcy code which governs the liquidation of a company whose proceeds are used to meet financial liabilities

Involuntary:
Company forced to restructure its financial obligations, could be implemented under Chapter 11 or Chapter 7 of the United States bankruptcy code

Pre-arranged:
Refers to Chapter 11 bankruptcy proceedings wherein the details of the bankruptcy are negotiated prior to formal filings