Need To Know

Veronis Leaves Veronis Suhler

John J. Veronis

, the chairman and co-CEO of Veronis Suhler Stevenson who co-founded the New York firm in 1981, has withdrawn from his partnership in the shop to pursue other media, information and financial opportunities, according to a prepared statement.

While Veronis’s partnership interest in Veronis Suhler has been redeemed by the firm, he intends to honor his commitments to Veronis Suhler funds, the statement said. Planning for the departure had been in the works for months and will reportedly not trigger key-man provisions in any of the firm’s funds.

John Suhler and Jeffrey T. Stevenson will continue in their roles with the firm. Suhler, who co-founded Veronis Suhler alongside Veronis, serves as founding partner and president of the firm. Stevenson, who joined the shop in 1982, is managing partner.

Veronis Suhler has raised six funds since 1987: Four were focused on sponsoring buyouts in the information, education, marketing services, media and communications industries; and two were focused on mezzanine investments in the same sectors.

Veronis Suhler’s most recent funds include its second mezzanine vehicle, VSS Structured Capital II LP, which closed on $312 million in 2009, and its fourth flagship buyout fund, VSS Communications Partners IV LP, which raised roughly $1.3 billion in 2005 and 2006.

U.S. Distressed Ratio Jumps

Ripples from the debt crisis in Greece and the speculation that other countries could eventually find themselves in a similar situation have made their way to the U.S. credit markets, according to Standard & Poor’s. Nearly 10 percent of all U.S. speculative-grade debt is now considered distressed by the ratings agency. Issuers of distressed credits have a more difficult time issuing new debt and are more likely to go into default.

Uncertainty and worry among investors has caused speculative-grade spreads to widen, and as a result the ratio of distressed debt (credits rated ‘BB+’ or lower with a spread of at least 1,000 bps relative to treasuries) soared in May after easing significantly just one month earlier.

As of May 25, the U.S. distress ratio stood at 9.4 percent (representing roughly $56.2 billion in speculative-rated debt), up from April’s distress ratio of 6.7 percent ($32.0 billion). The most recent ratio is almost a complete rebound to the March figure of 9.7 percent ($47.7 billion).

By industry, companies in the media and entertainment, high technology, and finance sectors accounted for about 61 percent of the total distressed debt figure. Issuers of distressed credits backed by LBO shops include Apollo Management’s real estate services provider Realogy Corp., which has $2.5 billion of outstanding distressed debt, and Sbarro Inc., the MidOcean Partners-owned quick-serve pizza chain, which has roughly $150 million in outstanding credits, according to S&P.