Transcom - comment

We are hearing that the largest bondholder is in discussions with Transcom regarding an Amend and Extend to address its December 2026 maturities. As we noted in our last note, any refinancing is likely to require the support of Altor, the private equity owner, and recovery to the bondholders will be contingent on Altor’s approach to a restructuring. As part of our analysis, we have outlined some scenarios varying the level of equity injection, debt forgiveness and cash paydown. The reality is the Company has not grown into its capital structure, and the 6.0x enterprise value to EBITDA multiple at which Altor acquired the business appears difficult to justify. Comparable listed peers are trading at approximately 4.5 to 5.0 times, all of which are larger in scale.