What refinancing alternative would minimize losses for a 26-bank consortium that had provided funds to troubled Allegheny International?
By the mid-1970s Allegheny International had diversified from being a mid-sized specialty steel concern into a consumer products and high-tech industrial conglomerate. Allegheny endured significant financial setbacks throughout the early 1980s and in 1986 it entered into a Revolving Credit Agreement with a consortium of 26 banks. This case asks students to consider the consortium’s options as Allegheny’s financial situation becomes dire: two exchange offers or, if the company is unable to renegotiate its debt, bankruptcy.
Case ID: 170402