Yahoo Finance Weight Watchers Creditors Prepare to Sign Cooperation Agreement
(Bloomberg) -- Some creditors of WW International Inc. are finalizing details of a cooperation agreement as they look to maintain a united front should the parent of Weight Watchers want to pursue talks, according to people familiar with the situation.
Most Read from Bloomberg
Germany to Order Ships, Armored Vehicles Worth Up to €7 Billion
Iran’s Better, Stealthier Drones Are Remaking Global Warfare
Blackstone $10 Billion Deal Is Latest Bet Property Near Lows
The group is working with law firm Gibson Dunn & Crutcher, said the people, who asked not to be identified as the information is private. By organizing, the creditors — which hold a majority of WW’s lone dollar bond and a $942 million term loan that have slumped in price this year — would bind together in any potential negotiations with the parent of Weight Watchers, the people said.
Messages left with Gibson Dunn weren’t immediately returned Monday.
Cooperation pacts have become increasingly common as creditors aim to ward off nasty fights by preventing the formation of factions among lenders. Such infighting is partly a consequence of an era of easy money that weakened lender protections and left creditors with few options but to turn against each other for a better spot in the repayment line.
The WW loan and dollar bond have hit record lows in recent days at below 45 cents on the dollar. The weight management industry is undergoing seismic changes given the rise of weight-loss drugs such as Ozempic and Wegovy.
“We have a very attractive, long-term credit agreement and comfort with our liquidity, which gives us ample time to deliver on our transformation strategy,” Chief Financial Officer Heather Stark said in a statement to Bloomberg News on Monday. “Should we opportunistically consider options to reduce our leverage, we would do so on our terms and aim to benefit stakeholders across the capital structure.”
Moody’s Ratings downgraded WW deeper into junk territory last month, citing concerns the company may not be able to grow revenue and sufficient free cash flow through 2025 after the top and bottom lines in 2023 fell well short of the ratings firm’s expectations.
But with no major debt maturities until 2028, the firm has time for its strategy to play out, Moody’s added.
Most Read from Bloomberg Businessweek
How Bluey Became a $2 Billion Smash Hit—With an Uncertain Future
Everyone Is Rich, No One Is Happy. The Pro Golf Drama Is Back
©2024 Bloomberg L.P.
