Barclays is on the prowl for Shutterfly investors

Bloomberg reports Barclays PLC is vetting potential investors to help photo personalization giant Shutterfly push out its looming debt problem, after talks with private credit lenders lost momentum, according to reporting by Reshmi Basu. Apollo Global Management Inc., which has owned Shutterfly since 2019, has been seeking a way out of its ownership of the company, which has since then gone through numerous leadership changes and plant downsizings. Adding to the pain is the continued struggle of its Lifetouch National Schools studio segment, which Shutterlfy purchased in 2018,  In addition to struggling to maintain its customer base in the wake of aggressive and nimble local competitors, Lifetouch has dealt with a very public PR problem, as unfounded allegations tied the company to the notorious Jeffrey Epstein case.

According to the report: “Apollo is expected to extend its unsecured debt holdings as part of a refinancing transaction, said the people, who asked not to be identified discussing a private matter. Representatives for Apollo and Barclays declined to comment, while messages left with the company weren’t returned.”

Shutterfly is grappling with a maturing $2.7 billion debt pile due next year. The Bloomberg report said banks like Barclays are stepping up after last year’s efforts to refinance Shutterfly via a private credit group led by General Atlantic stalled.

The outlook for Shutterfly’s debt, spread across term loans, secured and unsecured bond obligations, has been improving following years of distress and a rocky history in the credit market, the report said. S&P Global Ratings raised its grade by one notch to B- in June, citing improved credit metrics and its ability to generate sufficient cash flow to service debt. The firm’s current debt stack is born from a multi-layered deal executed in 2023. Its nearly $940 million loan due in 2027 is quoted at 98 cents on the dollar Thursday, up from 92.5 cents on March 2, according to data compiled by Bloomberg. The loan traded for less than 70 cents in 2023 (see the chart at right).