Lenders to Envision Healthcare Corp. are protesting a debt swap designed to put the private-equity-backed company on firmer financial footing, WSJ Pro Bankruptcy reported. A group of lenders represented by law firm Akin Gump Strauss Hauer & Feld LLP has told the company it believes its credit agreement prohibits a debt-exchange offer covering $1.225 billion in unsecured bonds. The debt swap, which is open until April 30, has allowed some bondholders to share in a collateral package previously reserved for the higher-ranking lenders. The warning from lenders doesn’t necessarily mean they will try to undo the debt exchange by Envision, but it could be an obstacle to raising additional financing. Struggling due to the impact of the coronavirus outbreak, Envision has seen its revenue fall as the pandemic eats into patient volumes for other types of illnesses and injuries. The company, backed by KKR & Co., said this month it would cut salaries among senior leadership and furlough staff to mitigate the financial damage. Such revenue losses are adding pressure for many indebted health-care companies, which are losing out on revenue on the everyday services that make up much of their business. Envision has hired law firm Kirkland & Ellis LLP to help renegotiate a debt load of more than $7 billion.
