Trouble Brewing?

While default rates are low, that doesn’t mean there isn’t trouble brewing. Buyouts has learned of several deals by established private equity players that have run into some issues.

American Asphalt & Grading Co., a provider of integrated infrastructure construction services to the Southern Nevada residential homebuilding market, is in default, according to a source familiar with the transaction. Code Hennessy & Simmons acquired a majority equity position in American Asphalt last year.

Omniflight, an Addison, Texas-based provider of helicopter and other flight services to hospitals, has had problems with its loans as well. According to a source familiar with the deal, the sub-debt payments on the loan have been blocked. Wind Point Partners bought the company last year from the Texas Growth Fund. GE Antares Capital provided the senior debt and Oaktree Capital Management provided mezzanine financing. Wind Point declined to comment but did dispute the accuracy of the facts presented to them.

Also, a recent $190 million senior secured credit facility made to home health care provider Tender Loving Care (TLC) Health Care Services is trading at a significant discount on the secondary market as a result of a disappointing performance. Banc of America, Monroe Capital and UBS participated in the refinancing. Arcapita (formerly Crescent Capital Investments) purchased TLC out of bankruptcy last year. The initial deal included a senior credit facility arranged by Wells Fargo Foothill. An affiliate of D.B. Zwirn Finance LLC also provided senior note financing. –M.S.