Case Study

Cutting through the noise around one of the most significant credit situations of the year

  • Credit
  • Multi Sector
  • North America

American Tire Distributors (ATD) is one of the largest independent suppliers to the replacement tire market, operating more than 140 distribution centres and serving approximately 80,000 customers across the U.S. and Canada. ATD was considered so stable that its private equity owners loaded the company with debt to finance an acquisition spree. However, after the loss of one of its major suppliers, Goodyear, ATD’s market value of $975 million of bonds and its $700 million term loan cratered.

Third Bridge's ability to promptly source a specialist who could most accurately define what the loss of Goodyear truly meant for ATD, enabled us to cut through the noise created by the most significant credit news of the period. This gave us time to react and adjust our positions accordingly.

Senior Analyst, Top 10 Credit Fund

Research Insight

When the news of the Goodyear loss broke, Third Bridge initiated a series of Forum Interviews, including a most impactful session with a former ATD senior vice president less than a week after the drop in value. The SVP predicted a difficult path forward for the company, citing the immediate impact of losing a flagship supplier and the likelihood that the company would not be able to pay off debts, leading to a bankruptcy declaration. These insights meaningfully moved the market as investors acted on the perspectives provided by the SVP during the interview.

In all, Third Bridge moderators conducted eight Interviews related to the company and the sector over the next two months, looking closely at other companies in the value chain that were undoubtedly going to be affected by the ATD decline.

Third Bridge - American Tire

Outcome

The detailed analysis of the sector, delivered by the Forum Interviews at such a critical time, motivated a U.S.-based, top-five asset manager (by AUM) to sign with Third Bridge.