Distressed claims to continuity

A private lending partner sold Phoenix Credit Investments a portfolio of non performing loans. One exposure was a construction company that was over indebted but still operationally viable.

Phoenix acquired approximately 60 percent of the company’s outstanding debt from multiple creditors at negotiated discounts ranging from 15 cents to 40 cents per dollar of face value.

Phoenix transferred those acquired claims away from the debtor and onto other counterparties, other operating companies willing to accept the liabilities. The objective was to remove the burden from the debtor’s balance sheet and stabilize the operating company’s risk profile.

In exchange, the debtor provided CAD 517,000 of contracted services to Phoenix. Phoenix resold those services into its affiliate network, effectively bringing the debtor new clients and converting a distressed credit exposure into a service backed recovery stream.

If the debtor faces future stress, Phoenix remains positioned to purchase additional claims and repeat the stabilization cycle, subject to viability.