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support for fair value realization

of stock investments in

DBM Global Incorporated

(f/k/a Schuff International Inc.)

 
 

Support of Minority Shareholder Interests

The Shareholder Forum had offered to support Appraised Value Rights ("AVR") of DBM (f/k/a Schuff International) minority shareholders in 2014 following a $31.50 per share tender offer by the company's controlling shareholder, HC2 Holdings, Inc., with the stated intent to proceed with a short-form merger "as soon as practicable.”

HC2 acquired DBM shares in the 2014 tender offer and other purchases bringing its total holdings to 92% of outstanding DBM shares, but has not proceeded with a merger. The Forum has continued to support the minority shareholder interests of its AVR participants in this context.

 
     

Forum reference:

HC2's exceptionally strong covenants for bond offering include commitments to restrict subsidiaries

 

For the initial report of the rating for the bond offering addressed below, see

 

Source: Moody's Investors Service, November 9, 2018 announcement

Announcement: Moody's assigns strongest covenant quality score in 5 years to HC2 Holdings' bond offering

09 Nov 2018

New York, November 09, 2018 -- Moody's Investors Service has assigned an overall covenant quality (CQ) score of 1.57 to HC2 Holdings, Inc.'s $540m _% senior secured notes due 2021. The score is the strongest the rating agency has assigned to any North American bond since March 2013.

Moody's scores covenant protections on a five-point scale, with 1.0 denoting the strongest investor protections and 5.0, the weakest. The agency assesses investor protections in six key risk categories: cash leakage (dividends), risky investments, leveraging, liens subordination, structural subordination, and change of control.

The bonds received a best-possible score of 1.0 for cash leakage risk and a score of 1.15 for risky investments, the strongest in this category for any North American bond since Moody's began tallying CQ scores in 2011. Notable investor protections against cash leakage include the absence of a builder basket and a prohibition against designating subsidiaries as unrestricted, while additional protections against risky investments include an obligation to apply (or offer to apply) asset sale proceeds to repay the bonds at 103%, a cap on investments in non-guarantor subsidiaries and a requirement of 100% cash consideration for specified asset sales.

Similarly, a score of 1.10 in the leveraging risk category is the strongest on record. The score is attributable to protections including the absence of a $1 debt test and the inclusion of numerous financial maintenance covenants.

Subscribers can read the full report,"HC2 Holdings, Inc. Covenant Quality Pre-Sale Snapshot: $540m _% Senior Secured Notes due 2021," at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1147782.

View the scores of similar issues: https://www.moodys.com/newsandevents/topics/covenants/-/007001/0/007001/-/0/-/0/tp.

See Moody's Covenant Quality Scoring Criteria: http://www.moodys.com/viewresearchdoc.aspx?docid=PBC_150958.

NOTE TO JOURNALISTS ONLY: For more information, please call one of our global press information hotlines: New York +1-212-553-0376, London +44-20-7772-5456, Tokyo +813-5408-4110, Hong Kong +852-3758-1350, Sydney +61-2-9270-8141, Mexico City 001-888-779-5833, São Paulo 0800-891-2518, or Buenos Aires 0800-666-3506. You can also email us at mediarelations@moodys.com or visit our web site at www.moodys.com.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

Evan Friedman
Senior Vice President
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Glenn B. Eckert
Associate Managing Director
Corporate Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

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The project supporting investor interests in DBM Global Incorporated (f/k/a Schuff International, Inc.) is being conducted by the Shareholder Forum for the benefit of Participants that have reserved Appraised Value Rights ("AVR") Management, subject to conditions including standard Forum policies that each Participant is expected to make independent use of information obtained through the Forum and that participation is considered private unless the Participant specifically authorizes identification.

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