Reporting from the Wall Street Journal details an independent monitor’s conclusion that Texas’ Public Utility Commission overcharged market participants by approximately $16 billion dollars during Texas’ recent energy crisis by electing to keep wholesale prices raised for 33 hours longer than the monitor deemed necessary. Although the monitor urged the Public Utility Commission of Texas to retroactively reprice the wholesale power market for that period, the Wall Street Journal subsequently reported that the Public Utility Commission of Texas has signaled that it does not intend to reprice power markets due to the potential for unintended consequences with the commission chairman noting that “it is impossible to unscramble this sort of egg.” [WSJ; Mar. 4, 2021; WSJ; Mar. 5, 2021]
The Wall Street Journal reports that optimism about economic recovery has triggered a selloff in US treasury securities and resulted in some fixed income investors pursuing riskier investments, such as below investment grade debt, equity-linked bonds, and certain stocks. [WSJ; Mar. 5, 2021]
Bloomberg reports that a group of Hertz Global Holdings Inc.’s unsecured lenders have proposed an alternative restructuring option to the currently contemplated sale of Hertz’s assets to two investment funds for up to $4.2 billion. Under the unsecured lenders’ proposal, Hertz’s restructuring would be centered around a debt-for-equity swap. The proposal also contemplates that shares in the reorganized debtors will be publicly traded. [Bloomberg; Mar. 4, 2021]
Marketwatch reports that Austin, TX based dine-in movie theater chain Alamo Drafthouse filed for chapter 11 bankruptcy protection on March 3, 2021, with plans for a sale to two investment firms. Alamo was subsequently authorized to access $7 million in DIP financing on March 4, 2021. [Marketwatch; Mar. 3, 2021]