Momentive Performance Materials, Inc.

Posted: 7 Feb 2012

See all articles by Victoria Ivashina

Victoria Ivashina

Harvard University; National Bureau of Economic Research (NBER)

David S. Scharfstein

Harvard Business School - Finance Unit; National Bureau of Economic Research (NBER)

Date Written: August 26, 2010

Abstract

After getting close to violating its loan covenants in 2009, Momentive took a variety of actions over several months to restructure its debt. In particular, in May of 2009, Momentive had exchanged a fraction of its outstanding notes. In November of 2009, it proposed an amendment that sought to extend the maturity on the loan used to finance the Momentive buyout and allow issuance of senior secured notes. The case is set up from the perspective of a hedge fund that holds a fraction of Momentive's syndicated loan. The case serves as a vehicle for discussing contractual differences between public and private debt and challenges in its restructuring.

Learning Objective: Debt restructuring and coordination problems among creditors.

Suggested Citation

Ivashina, Victoria and Scharfstein, David S., Momentive Performance Materials, Inc. (August 26, 2010). Harvard Business School Finance Case No. 210-081. Available at SSRN: https://ssrn.com/abstract=2000802

Victoria Ivashina

Harvard University ( email )

Harvard Business School
Baker Library 233
Boston, MA 02163
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David S. Scharfstein (Contact Author)

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States
617-496-5067 (Phone)
617-496-8443 (Fax)

HOME PAGE: http://www.people.hbs.edu/dscharfstein/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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