Private credit managers providing bankruptcy financing to Rockport

Two private mezzanine managers and one business development company were also among the backers of a $60m prepetition ABL backing the firm’s buyout.

Rockport Company, the Newton, Massachusetts-based shoemaker, received approval on Tuesday for a bankruptcy financing provided by lenders that include multiple private credit managers.

Crescent Capital Group, GoldPoint Partners and KKR-managed Corporate Capital Trust are all lenders on the $60 million asset-based loan that Rockport will use to help fund its operations. The loan is priced at LIBOR plus 3 percent or separate, defined base rate plus 2 percent. The debtor-in-possession financing also carried $4 million in letters of credit.

Crescent declined to comment. KKR and GoldPoint were not available for comment.

Crescent’s investment came from its $3.4 billion Crescent Mezzanine Partners VI. Limited partners that committed to Crescent’s fund – which had an 8.1 percent net internal rate of return and 1.24x total value paid in multiple as of 30 September – included the Florida State Board of Administration and the Oregon Public Employees’ Retirement System. The firm has been actively involved in the workout, a source familiar with the matter said.

Goldpoint’s capital came from its $980 million NYLCAP Mezzanine Partners III. Investors included the Municipal Employees’ Annuity & Benefit Fund of Chicago, the labor union retirement fund Western Conference of Teamsters Pension Plan and the financial planner Pentegra’s Pentegra Defined Benefit Plan.

CCT currently holds $38.13 million of the ABL, and is marked at $17.74 million, or 46.52 percent of par value, according to Thomson Reuters BDC Collateral. CCT also holds Rockport equity. In addition, the firm holds the debt of Payless, a shoe retailer that also went through bankruptcy.

The three firms were lenders on both Rockport’s prepetition $60 million ABL and $10 million of letters of credit, used to help bankroll a purchase of Rockport from Reebok by private equity firm Berkshire Partners and New Balance. The five-year loan was priced at LIBOR plus 2.5 percent, according to Thomson Reuters LoanConnector. In 2017, the Berkshire and New Balance sold the company to Rockport’s prepetition noteholders.

Rockport’s bankruptcy filing on Monday was accompanied with an offer from mid-market private equity firm Charlesbank to buy the firm’s assets that included $150 million cash along with the purchase of certain inventory and assumption of liabilities.