Weekly Wrap: Texas Capital adopts CRT strategy at regional bank level

Six large firms sought bankruptcy in the U.S. through March 6, marking the second consecutive week of elevated Chapter 11 activity.

Dine-in movie chain Alamo Drafthouse Cinemas Holdings, stationery retailer Paper Source Inc. and Brazos Electric Power Cooperative helped propel total filings to 34 as of Monday, according to data compiled by Bloomberg. That includes firms with liabilities over $50 million.

Despite falling short of the 36 bankruptcies in the corresponding period of 2020, it’s higher than the average of about 24 seen by this point of the last 10 years. The peak was 72 in 2009.

“Movies and retail are highly pressured,” said Brian Sanders, an analyst at CreditRiskMonitor. Smaller private businesses have less access to capital than public companies like AMC Entertainment Holdings Inc. that have raised funds in debt and equity markets, he said.

Both Alamo and Paper Source plan to hand control to lenders in bankruptcy. So-called credit bids let companies wipe out debt in exchange for equity in an otherwise viable business.

The fate of Brazos is less clear. The case is unusual, complex and multifaceted, given that the historically healthy firm — a non-profit owned by its customers — was toppled by a “catastrophic, unprecedented weather event,” lawyer Louis Strubeck of Norton Rose Fulbright said in a first-day hearing last week. Judge David R. Jones said the case resembled a Chapter 9, referring to the law used by financially distressed municipalities.

An alternative asset manager is reviving the securitization platform of a former leading player in property-assessed clean energy financing that declared bankruptcy in December.

According to a presale report from DBRS Morningstar, an affiliate of Miami-based Kawa Capital Partners is sponsoring a $63.65 million notes offering backed by property-assessed clean energy bonds via the Home Energy Renovation Opportunity (HERO) shelf formerly utilized by Renovate America.

The PACE assessments included in HERO Funding 2021-1 were acquired by Kawa in a series of acquisitions between August and January, involving Renovate America and the municipal and regional bond issuers in California, Missouri and Florida, according to DBRS Morningstar’s report.

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Glen Fest

It only took a few weeks for Marc Rowan to put his stamp on Apollo Global Management Inc.

Rowan, the private equity firm’s co-founder and incoming chief executive officer, was the force behind an $11 billion deal that will remake the business: Monday’s announcement of a full acquisition of Athene Holding Ltd. In one move, he not only reshaped Apollo, but also showed the world that the firm is moving past the 30-year reign of Leon Black.

The Athene acquisition completes a process that Rowan – who succeeds Black as CEO no later than July – started in 2009, when he created the annuity business so that it would send vast sums of cash to Apollo for investments. Full ownership brings the model closer to Warren Buffett’s approach at Berkshire Hathaway Inc. that inspired the initial move. It also puts Rowan’s vision – not Black’s – at the center of Apollo’s future strategy.

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Bloomberg