The article discusses the growing trend of liability management exercises (LMEs) in the technology, media, and telecom (TMT) sectors, highlighting the aggressive tactics used by companies like Lumen Technologies that have alarmed creditors. It outlines the challenges faced by companies such as iHeartMedia and Altice USA, which are dealing with structural issues and declining revenues. The piece also covers the legal and financial maneuvers by companies like EchoStar, which are under pressure to manage debt and raise capital. The article emphasizes the potential risks and complications of LMEs, including litigation and bankruptcy, as companies attempt to extend debt maturities and improve liquidity.

An ad hoc group of lenders to Verifone, including Carlyle Group, CIFC Asset Management, KKR, PGIM, and First Eagle, is working with Gibson Dunn ahead of the 2025 maturity on the fintech group's term loan. Verifone's recent financials were weaker than expected, leading to a significant drop in the value of its term loan. Francisco Partners, which took Verifone private in 2018, has been diversifying the company's business by expanding into software and analytics. Verifone, Francisco Partners, and Gibson Dunn did not comment on the matter.

Cumulus Media's secured creditors have entered a cooperation agreement following a distressed debt exchange offer by the company. The agreement includes over 70% of the first lien loan and senior secured notes due in 2026. Guggenheim Partners was appointed as a financial advisor by the creditor group. Cumulus proposed exchanging existing notes and term loans for new ones with different terms, with the exchange offer expiring on March 26. The company's annual adjusted EBITDA dropped by 45.3% in 2023. Cumulus had previously emerged from Chapter 11 bankruptcy in June 2018, with various legal and financial advisors involved. Current trading values for the company's securities were also provided.

The US securitization market is experiencing varied trends across its segments. While the ABS market is thriving, driven by high demand for short-duration, high-quality paper, the MBS and CLO markets face challenges due to high interest rates and economic uncertainties. The ABS market's resilience is attributed to strong consumer credit and liquidity, with expectations of continued growth in 2024. Conversely, the RMBS market is struggling, with potential growth from non-traditional sources. The CLO market anticipates increased defaults and a cautious investor approach. Interest rate stability may influence spreads and issuance across these markets.

Investors are increasingly interested in esoteric asset-backed securities (ABS) as a means to diversify away from traditional consumer-focused ABS, amid concerns over the US consumer market's health. Esoteric ABS, which includes assets like equipment and music royalties, offers longer weighted average lives and higher interest rates, making them attractive in the current economic climate. The market's growth is supported by insurance companies and alternative asset managers, though challenges remain in secondary market liquidity and consistent issuance. The sector's resilience is evident despite a decline in RMBS and CMBS volumes, with significant growth in areas like solar and data centers.

Investor participation in private securitization has significantly expanded beyond traditional insurance companies, as discussed at the ABS East conference. The event highlighted the growing role of private markets in ABS, with more alternative asset managers deploying capital in this sector. The conference also noted a shift in funding strategies due to interest rate volatility and macroeconomic risks, leading to a more permanent diversification of funding channels. Despite a decline in mortgage-backed securities issuance, ABS primary issuance has remained resilient, with a year-to-date volume of $234.6bn, up 8% from the previous year.

Willis Lease Finance Corp, an aircraft leasing company based in Florida, raised $410 million through an aircraft engine lease securitization, marking the first public or 144A aviation ABS deal in over a year. The deal, named WESTF 2023-A, is the company's eighth aviation ABS and was rated A/A by Fitch and KBRA. It featured a single class of notes with a 4.55-year average life, priced at 350bp over the I-curve with an 8% coupon and 8.461% yield. The deal reflects challenges in the aviation finance market due to high interest rates and the need to reassess business models dependent on securitization.

Rapidly rising rates and busy primary issuance in the ABS market are expected to lead to wider spreads, with added macro risk threatening newfound appetite. Concerns about Federal Reserve’s rate policy, geopolitical risks, and other economic factors are causing investors to reconsider their activity levels. Despite the volatility, the US ABS primary market remains busy, with issuers keen to fulfill funding plans. However, spread widening is observed across various ABS classes, and investor fatigue is slowly creeping in. High-quality, short-weighted average life ABS are preferred in the current environment.

Brooke Major-Reid, chief capital officer at Affirm, discusses the state of the ABS market, highlighting Affirm's strategic approach to managing risk and funding amidst economic uncertainties. Affirm's recent $750m ABS deal, the largest in its history, signals a return of risk appetite in the market. Major-Reid emphasizes the importance of diverse funding channels and maintaining strong relationships with investors. Despite optimism about business growth, caution remains due to potential macroeconomic headwinds.

A substantial pipeline of ABS deals is poised to enter the market following the IMN and FINN ABS East conference in Miami. However, high rates volatility is causing issuers to reconsider their fourth-quarter funding plans. While some issuers are eager to proceed before year-end, others are looking towards the first quarter of 2024. The bond market is anticipating another 25bp rate increase from the Federal Reserve, making immediate issuance potentially more cost-effective. Different sectors, such as auto and aviation, have varying optimal issuance times based on rate stability.