Franklin Resources offloaded a hefty slice of Ferrellgas Partners’ near-term bonds in a block trade with Barclays yesterday (26 September), according to three sources following the situation.
The asset manager sold a large proportion of its USD 50m position in the propane provider’s USD 175m 8.625% senior unsecured notes due 2020, two of the sources said. One of the sources specified that Franklin sold roughly half of its stake in the bonds.
MarketAxess lists four large trades in the 2020 notes yesterday: a dealer buy at 75.5, quickly followed by two dealer sells at 75.75, and another dealer buy at 75.75 some hours later.
Ferrellgas hired PJT Partners as a financial advisor and Paul Weiss as legal counsel earlier this year to restructuring its balance sheet.
As of 30 April, the company is 8.9x levered, based on USD 234.2m of TTM adjusted EBITDA and USD 2.08bn of total debt. Adjusted EBITDA for the quarter ended 30 April was up 2% year-over-year at USD 88.6m, according to company documents.
In its 3Q19 earnings report, Ferrellgas also notified investors that it was suspending quarterly conference calls, as it evaluated options to address its leverage.
At the end of July, the NYSE notified the company that it was no longer in compliance with the exchange’s continued listing standards. Ferrellgas has four more months to regain compliance, according to the press release.
Barclays declined to comment. Ferrellgas and Franklin did not respond to requests for comment.