NEW YORK: Apax Partners-backed Tosca Services LLC is holding discussions with some creditors for a new loan that would give the company a cash boost, according to people familiar with the matter.

The proposal would also allow the Atlanta-based maker of plastic crates and other reusable containers the option to pay a portion of its interest in kind over a limited period, said some of the people, who asked not to be identified discussing a private matter.

Payment-in-kind debt allows borrowers to pay interest with additional debt.

Discussions are ongoing and terms of the deal may change, the people said.

The company is working with Evercore Partners as a financial adviser, with a group of lenders organised with law firm Milbank LLP, people said.

Messages left with with the company, Evercore and Milbank were not not returned. A representative with Apax declined to comment.

Tosca’s US$606mil term loan that comes due in 2027 is quoted at around 87 US cents on the dollar, according to data compiled by Bloomberg. Both Moody’s Investors Service and S&P Global Ratings cut their ratings on the company last year.

S&P lowered the company to CCC+ from B- in July 2023, citing cash flow deficits, high leverage and elevated capital expenditure needs. Moody’s dropped its rating to CAA1 from B3 in December.

Tosca, which was acquired by Apax in 2017, provides reusable packaging products to grocers and big box retailers.

 - Bloomberg