Clearlake’s Newfold Seeks Support for Debt Deal Via Side Pacts

Clearlake Capital-backed Newfold Digital is actively pursuing additional creditor support for its recently agreed debt restructuring, engaging lenders not involved in initial negotiations through side pacts. The restructuring, previously negotiated with key creditors like PIMCO and GoldenTree, includes approximately $100 million in new financing and a debt exchange aimed at overhauling the web services provider's capital structure and repayment priorities.

Analysis

Newfold Digital, a web services provider backed by Clearlake Capital and Siris Capital, is actively pursuing a debt restructuring. An initial agreement was reached with creditors including Pacific Investment Management Co. and GoldenTree Asset Management, which secured approximately $100 million in new financing and proposed a debt exchange to alter the company's capital structure and repayment priorities.

The current development involves Newfold seeking additional creditor support for this restructuring through side pacts with lenders not involved in the original negotiations. This indicates a potential need for broader consensus or a more complex alignment of interests among its diverse creditor base.

The overall sentiment surrounding this development is moderately negative with an uncertain tone, reflecting the ongoing nature of negotiations and the challenges associated with securing full creditor buy-in. While the initial agreement provides new capital, the necessity of these side pacts suggests potential hurdles in achieving a swift and comprehensive resolution to Newfold's financial situation.

Key Decisions for Investors

• Investors should closely monitor the progress and terms of Newfold Digital's ongoing creditor negotiations, particularly the success of securing additional support via side pacts.
• Evaluate the potential impact of the final restructuring on the company's long-term operational stability and the recovery prospects for various tranches of its debt.
• Consider the implications for private equity sponsors Clearlake and Siris Capital, as the complexity of this restructuring may affect their investment timelines and valuations.