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BDC Credit News: June 2, 2020

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Performing Company News

BlackHawk Mining Sold (SLRC)

Alix Partners: Buys antitrust litigation specialist Matrix Economics  (BBDC)

The deal is AlixPartners’ first inorganic move since acquiring the US operations of Zolfo Cooper, years after it also absorbed the European team of the financial advisory and restructuring consultancy. The addition of Matrix Economics adds a team of around ten professionals to its American ranks, including founder and partner Tasneem Chipty and principals Ryan Booth and Hiu Man Chan, and boosts AlixPartners’ capabilities in competition economics.

Underperforming Company News 

Pace Industries: Exits Chapter 11 – BDC Reporter

Six weeks after the BDC Credit Reporter wrote about Pace Industries, the company exits, but with a very different balance sheet.

BDC Credit Review

Capital Southwest (CSWC): IQ 2020 (BDC:NAV Change Table)

We reviewed 45 company portfolio in portfolio and identified 10 underperformers with a FMV of $103.9mn, equal to 18.8% of investment assets. These include 4 underperformers, with an FMV of 3.3% of the total, up from 3 in the prior quarter.

Sector News

Rental fleet collapse drags down U.S. vehicle sales (June 3)

“Automakers could lose up to 12% of their annual U.S. vehicle sales in 2020 as car rental companies slammed by the coronavirus pandemic slash fleets and restructure, according to Jefferies”.

Economy News

U.S. Economy Faces Long Recovery From Coronavirus Effects, Experts Say – WSJ (June 1)

 “The U.S. economy could take the better part of a decade to fully recover from the coronavirus pandemic and related shutdowns, a U.S. budget agency said, as a series of surveys pointed to continuing weakness in global manufacturing. The Congressional Budget Office, a nonpartisan legislative agency, said the sharp contraction triggered by the coronavirus caused it to mark down its 2020-30 forecast for U.S. economic output by a cumulative $7.9 trillion, or 3% of gross domestic product, relative to its January projections. GDP isn’t expected to catch up to the previously forecast level until the fourth quarter of 2029, the CBO added…While the economy is expected to resume growing after this year, the pace of growth likely won’t be fast enough to quickly make up for the ground lost during the coronavirus pandemic. The difference between the CBO’s latest projection for GDP and its January forecast “roughly disappears by 2030,” adjusted for inflation.”.

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