Business Travel Firm CWT Skips Debt Payment as Talks Begin
(Bloomberg) -- CWT, one of the world’s largest business travel managers, skipped a debt payment as it begins negotiating with creditors, according to people with knowledge of the matter.
The privately-held company, which was known as Carlson Wagonlit Travel prior to a 2019 rebrand, told its investors Wednesday that it didn’t pay interest on its $250 million third-lien notes due 2026, the people said, asking not to be identified discussing a private matter. The bonds pay 9.5% cash and 2% in-kind.
The missed coupon payment, which was due June 15, starts the clock on a 30-day grace period before a formal default. CWT is seeking to reach a deal with creditors to rework its debts in that time, the people said, though forbearance could be granted to allow talks to continue.
CWT and its bond investors are discussing options including swapping debt for equity to help the company boost its liquidity as business travel begins to resume, the people said. Certain creditors have chosen to restrict their trading and begin formal talks with the company, while others are planning to sign non-disclosure agreements in the coming days, they added.
Representatives for CWT didn’t return messages seeking comment. Reorg previously reported that the company’s creditors were preparing for debt talks.
CWT is getting advice from law firm Kirkland & Ellis and investment bank Houlihan Lokey, said the people. A group of third-lien noteholders are advised by Glenn Agre Bergman & Fuentes, while another group consisting of bondholders is working with Stroock & Stroock & Lavan. Representatives from the advisory firms either declined or didn’t return messages seeking comment.
CWT coordinates business travel, meetings and events for companies. Prior to the Covid-19 pandemic, it handled around 100 meetings and events daily and corresponded with about 60,000 travelers, according to its website. The Minneapolis-based company has around 15,000 employees and was founded in 1994 through a combination of two travel agencies.
But the pandemic upended the travel industry, with revenues at some businesses plunging to near zero amid global shutdowns. The disruptions forced scores of hotels and tour providers into bankruptcy, while others, like bookings company Travelport, avoided court protection after receiving rescue financing.
The company’s third-lien notes due 2026 last traded around 59 cents on the dollar, according to Trace data. Its first-lien notes due 2025 were around 92 cents.
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