Eye Care Partners is set to close a deal with creditors this week to sell assets and repay debt at a discount. Under the agreement, lenders including Anchorage Capital, Diameter Capital Partners and King Street Capital Management would accept reduced payments if the company sells its businesses within a timeframe and uses proceeds to pay down debt. In the best case scenario, the discount would be between $300 and $400 million, out of roughly $2 billion of debt.
The Swiss private equity firm Partners Group Holdings-backed company went through another debt workout in 2024. Eye Care, which provides eye care services in over 700 locations across almost 20 states in the US, announced the sale of its optometry business to My Eye Dr late last month. The sale is expected to close in the fourth quarter this year and is subject to regulatory approvals.
Once completed, the company will use proceeds to pay down $110 million on its first-out revolver, $286 million on its first-out term loan at par, and about $164 million on the first-lien second-out term loan at a 12-cent discount to par. Eye Care also announced a liability management exercise involving a distressed exchange of participating first-lien second-out term loan lenders into a new first-lien 1.5-out term loan, which includes an option to extend payment-in-kind interest beyond early 2027 and the maturity of the loan beyond November 2028. Kirkland & Ellis and Centerview Partners advised the company in the debt deal, while the ad hoc group of holders was advised by Gibson, Dunn & Crutcher and Moelis & Company LLC.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing