Altice USA's Restructuring Gambit: How Creditor Coordination Is Shaping the Path Forward

In the high-stakes world of corporate debt restructuring, Altice USA's 2025 gambit stands as a case study in the evolving power dynamics between borrowers and creditors. The company's recent moves—ranging from a $1.0 billion asset-backed loan secured by fiber assets to the formation of a creditor cooperation agreement (Co-op)—highlight a strategic shift toward collective bargaining among lenders. This approach, while offering clear advantages in managing Altice's $3.4 billion Adjusted EBITDA target for FY 2025Altice USA Reports Second Quarter 2025 Results^[1], also exposes vulnerabilities in a landscape where liquidity constraints and aggressive liability management exercises (LMEs) remain persistent threatsDistressed Company Lenders Look to Cooperate to Avoid '...Violence'^[5].

Strategic Advantages of Creditor Coordination

The most immediate benefit of Altice's creditor coordination agreements lies in their ability to unify disparate stakeholders. By forming a steering committee of creditors and extending participation to external lenders, Altice has created a framework to resist fragmented negotiations that often favor borrowers. According to a report by Bloomberg Law, such agreements are increasingly used to counter “anti-cooperation” language in credit agreements, where borrowers attempt to dilute creditor influence through uptiering or drop-downsDistressed Company Lenders Look to Cooperate to Avoid '...Violence'^[5]. In Altice's case, the Co-op restricts individual creditors from pursuing separate deals and sets limits on selling holdings, ensuring a cohesive approach to restructuringDistressed Company Lenders Look to Cooperate to Avoid '...Violence'^[5].

This alignment has already borne fruit. The $1.0 billion asset-backed loan secured by HFC assets in the Bronx and Brooklyn service areas—backed by Cablevision Lightpath—demonstrates how creditor cooperation can unlock liquidity without triggering contentious LMEsRiskier firms take ABS route amid fervor for AI infrastructure^[2]. Unlike traditional debt exchanges, which often erode value for certain creditors, asset-backed financing offers a more transparent path to restructuringRiskier firms take ABS route amid fervor for AI infrastructure^[2]. For Altice, this approach reduces reliance on volatile capital markets while providing flexibility to fund its fiber and mobile expansion plansLoan Market Covenant Trends - 1Q25^[4].

Risks and Structural Challenges

Yet, creditor coordination is not without its pitfalls. One key risk is the potential for value erosion if restructuring terms disproportionately benefit specific creditor tranches. As noted in a report by 9fin, asset-backed financing can create winners and losers among creditors, particularly when collateral is unevenly distributedAltice USA Reports Second Quarter 2025 Results^[1]. Altice's debt structure, with a weighted average cost of 6.8% and a 3.6-year average lifeAltice USA Reports Second Quarter 2025 Results^[1], suggests manageable leverage costs in the short term, but long-term sustainability hinges on its ability to reduce net leverage ratios—a goal complicated by ongoing subscriber losses in video servicesDistressed Company Lenders Look to Cooperate to Avoid '...Violence'^[5].

Moreover, the Co-op's 18-month duration (with extension options) introduces uncertainty. While this timeframe allows creditors to negotiate favorable terms, it also delays resolution, potentially exacerbating operational and financial pressures. For instance, Altice's broadband subscriber growth and reduced churn are positive signsLoan Market Covenant Trends - 1Q25^[4], but these gains must offset the costs of capital expenditures tied to fiber deployment and AI-driven operational toolsDistressed Company Lenders Look to Cooperate to Avoid '...Violence'^[5]. If the Co-op fails to secure broad creditor support or if market conditions deteriorate, Altice could face a liquidity crunch similar to the Altice France saga, where a 24 billion euro debt restructuring required 55% creditor backing to proceedDe Pardieu advises the Altice group on the restructuring of its financial debt^[3].

Broader Implications for High-Leverage Restructurings

Altice's experience underscores a broader trend: creditors are increasingly asserting control in distressed scenarios. As highlighted in the LSTA's 1Q25 report, cooperation agreements are becoming standard tools to counter borrower-driven LMEs, with Altice's Co-op serving as a template for future negotiationsAltice USA Reports Second Quarter 2025 Results^[1]. However, this shift also raises questions about the balance between creditor power and borrower flexibility. While Altice's creditors have successfully resisted “anti-Co-op” provisions in credit agreementsDe Pardieu advises the Altice group on the restructuring of its financial debt^[3], the long-term viability of such arrangements depends on maintaining alignment as market conditions evolve.

Conclusion

Altice USA's restructuring gambit is a double-edged sword. The creditor coordination agreements provide a structured path to manage its $3.4 billion EBITDA target and fund strategic initiatives, but they also expose the company to risks tied to uneven value distribution and prolonged negotiations. For investors, the key takeaway is clear: in an era of rising interest rates and economic uncertainty, the ability to align creditors—rather than antagonize them—will determine the success of high-leverage restructurings. Altice's journey offers a blueprint, but it also serves as a cautionary tale about the fragility of collective action in a fragmented debt market.