Oregon Tool has hired Milbank to weigh its options amid a faltering financial performance, according to market sources. These sources said that Davis Polk is representing an ad hoc group of creditors, adding that Oregon Tool had not proposed a liability management exercise (LME) as of last week.
Milbank, Davis Polk, and Oregon Tool’s sponsor Platinum Equity did not immediately respond to requests for comment.
Moody’s on Aug. 22, 2024 said Oregon Tool is experiencing “historically low growth” in its forestry and agriculture end markets, noting that absent a “substantial recovery” in earnings and cash flow, the company’s capital structure would be “unsustainable.” As a result, the agency projected Oregon Tool depleting its liquidity within 12 months; as of June 30, 2024, the company had $32 million in balance sheet cash and $43 million of revolver availability.
The company’s $1.2 billion of debt includes an $850 million senior secured first-lien term loan due 2028, a constituent of the Morningstar LSTA US Leveraged Loan Index.
Oregon Tool’s term loan fell to 58/60 earlier this week, from around 70/72 at the end of December 2024, sources said. The company’s 7.875% unsecured notes due 2029 were trading in odd lots at around 43 as of early this month, according to MarketAxess.
S&P Global Ratings in February 2023 downgraded Oregon Tool to CCC+, from B-, retaining its negative outlook, with the agency citing weakening demand from original equipment manufacturer customers along with macroeconomic challenges. The company’s term loan was also lowered to CCC+, from B-, and its unsecured bonds were cut to CCC, from CCC+.
Oregon Tool is a global manufacturer and distributor of consumable parts and attachments used in forestry, lawn and garden, agriculture and concrete cutting applications.
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