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JZ Capital breaches debt covenant

JZ Capital breaches debt covenant – JZ Capital has confirmed that it has not yet reached final agreement with its lenders as to the amended terms of its senior facility with Guggenheim Partners and is therefore in breach of its minimum asset coverage ratio and in default under the facility. The company is in discussions and considers that it is close to procuring the necessary waivers from and securing agreement with its lenders as to amended facility terms. A further announcement is expected shortly. [Guggenheim allowed JZ to pay the 30 September payment on its CULS, which gives us some encouragement that an agreement will be reached.] However, the company also notes that, if the existing or any other event of default under the senior facility were to continue on any subsequent CULS interest payment date, the company would be prohibited from making payments to the holders of the CULS, absent a waiver, a further consent or the amended terms of the facility allowing for such payments to be made.

The writedown in the valuation of the property portfolio is likely to be about $110m – the previous guidance was between $80 to $100m.

The company intends to recommence its monthly NAV announcements following the publication of its results for the six-month period ended 31 August 2020.

Finally, the proposed secondary sale of certain of its US micro-cap assets has continued to progress in a positive manner and an agreement is expected to be reached and announced shortly.

JZCP : JZ Capital breaches debt covenant

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