Financial challenges in the energy sector forced oil and natural gas producers and ancillary industries to seek out-of-court restructurings in the first quarter of 2019.

In addition to oil and gas exploration and production companies seeking restructurings, offshore supply vessel and services companies that were affected by industry financial issues also sought to improve their balance sheets, credit facilities and operations through restructurings.

The most notable oil and gas companies to restructure out of court included Houston-based EP Energy Corp. (EPE) which in March said it would consider strategic alternatives such as debt issuances, refinancing and assets sales to avoid defaulting on its debt obligations.

Fort Worth, Texas-based oil and gas producer Approach Resources Inc. (AREX) also in March said it would pursue an array of financing alternatives and deleveraging transactions, including a potential debt-for-equity exchange to avoid breaching financial covenants under its revolving credit facility.

Several offshore transportation services companies suffered financial difficulties that required out-of-court restructurings as a result of the financial problems oil and gas producers were having.

Bermuda-based offshore vessel supply provider Nordic American Offshore Ltd. (NAO) in March extended covenant waivers on its $150 million revolving credit facility as it negotiated with lenders to refinance the loan.

Bourbon SA, a French provider of offshore services to the oil and gas sector, in February launched an out-of-court restructuring after being unable to make its loan payments.

Covington, La.-based Hornbeck Offshore Services Inc. (HOS) in February completed a debt exchange that swapped $131.6 million of 5.875% unsecured notes due in 2020 for a new $111.9 million senior second-lien term loan due in 2025.

Distress continued to plague the retail sector as more major retailers sought out-of-court restructurings, including luxury department store operator Neiman Marcus Group Ltd. LLC and iconic florist FTD Cos. Inc.

Neiman Marcus in March launched an out-of-court restructuring seeking approval of its lenders to extend maturities on about $4.4 billion in debt.

FTD in March modified its credit agreement with Bank of America NA to allow the company to increase its credit limit from $85 million to $167.5 million when the loan matures in September.

Fallout from retail distress has produced a cloud over ancillary businesses, forcing out-of-court restructurings of marketing service companies that serve the retail sector.

Marketing services provider Affinion Group Holdings Inc., which provides customer services for the retail, travel, financial services and internet commerce sectors, is seeking a debt-for-equity swap and rights offering that would deleverage the company’s capital structure and improve its liquidity.

Retail marketing service company Crossmark Holdings Inc., which holds $52.5 million debt on a revolving credit facility and $425 million on a first-lien term loan, is working on an out-of-court restructuring with its lenders.