Service King disclosed today that CFO Mark Hutchens departed the company last week as part of a “mutually-agreed separation,” according to two sources familiar with the matter. Kathy Kraay, who has served as Vice President of Finance and Investor Relations since January 2017, will now take on the CFO role, the sources added. 

The auto repair company is facing earnings erosion due to the ongoing COVID-19 pandemic, leading to the hiring of a host of advisors across the capital structure.

The company has hired PJT Partners and Kirkland and Ellis to assist on strategic alternatives, as reported. Meanwhile, an ad hoc group of lenders added Evercore and Gibson Dunn to their roster to prepare for potential negotiations. A bondholder group has also formed with Houlihan Lokey and Akin Gump. 

As of 28 March, the Blackstone and Carlyle-owned company’s leverage was 8x through the first lien and 12.1x total on an unadjusted EBITDA basis through USD 1.09bn of total debt, as reported. Giving credit for a total USD 44.7m of addbacks, leverage is 5.3x through the first lien and 8.1x total. 

At the time, the company had a cash balance of USD 165m. It fully tapped its USD 100m revolver during 1Q after the start of the pandemic, as previously reported. 

Service King initially declined to make a 1 April coupon payment to its bondholders, but paid the obligation within the 30-day grace period.

The USD 375m 7.875% senior unsecured notes due 2022 traded Tuesday (7 July) at 85 to yield 16.135%, down from trades at 86.5 yielding 15.201% on 1 July, according to MarketAxess. The notes have trended lower over the last month after reaching as high as the 89 area.

The USD 600m Libor+ 275bps (1% floor) first lien term loan due 2021 is quoted in the 89.363/91.475 context today, down half a point from trades at 89.947/92.056 at the beginning of the week, according to Markit.

Carlyle and Blackstone did not return requests for comment. Service King did not respond to a request for comment.

2020 Debtwire