The gun company continues to face a challenging retail environment, with one of its biggest outlets for sales, Walmart Inc, saying this year it would stop selling ammunition for handguns and some assault-style rifles in its stores.From plinking to personal protection, varmint control to big game hunting, and competition and other shooting sports, Remington has products to meet all of your handgun, shotgun, and rifle ammo needs. Some of the guns are marketed for hunters of coyotes, foxes and bobcats. Remington still makes AR-15-style weapons that are lightweight and known for their “hair-splitting” accuracy, according to its website. Its founder, Andy Redleaf, stepped down this year, passing the baton to senior portfolio managers Rob Vogel and Paul Twitchell. Whitebox’s longest-standing fund has seen annualized returns of more than 16% since inception, according to one of the sources. The hedge fund has been stepping up its bets on distressed debt, and has been involved in the restructuring of Puerto Rico’s debt, department store Sears’ bankruptcy and gaming company Caesars Entertainment Corp. Whitebox has not financed a gunmaker other than Remington, one of the sources said. The loan that WhiteBox extended has dibs on Remington’s assets, protecting Whitebox in any future debt restructuring, one of the sources said. The loan, which Remington arranged as part of its bankruptcy last year, had a three-year maturity, and it is not clear why Remington pursued the refinancing.
Whitebox doubled down on its investment this spring, helping Remington refinance the asset-backed loan, the sources said. That left six other banks still participating in the loan. Whitebox bought Bank of America’s $43.2 million portion of a $193 million asset-backed loan to Remington at a discount to its face value, one of the sources said. The bank had vowed it would stop financing “military-style” weapons during Remington’s bankruptcy, after a former student of a Parkland, Florida, high school massacred 17 people with an assault rifle in February 2018. Whitebox, which was a creditor of Remington before it filed for bankruptcy, first stepped in to replace Bank of America Corp as a lender last year, according to the sources. “A hedge fund is a private entity, it doesn’t need to answer to public shareholders.” “Given the baggage of these particular loans for banks that are public companies, it is an invitation to hedge funds to get in and relieve the bank of an asset they don’t really want to hold,” said Campbell Harvey, a professor finance at Duke University. It also underscores the emergence of hedge funds as “shadow banks,” replacing traditional lenders to companies.
Whitebox’s investment in Remington illustrates how some hedge funds, whose investors include pension funds, financial institutions and high-net-worth individuals, do not share the same reputational concerns as many banks. Supreme Court over its role as a gun manufacturer. It exited bankruptcy last year, but still faces a lawsuit from the families of the Sandy Hook victims in the U.S. Remington, the maker of an AR-15-style semi-automatic rifle used in the Sandy Hook Elementary School shooting of six adults and 20 children in 2012, filed for bankruptcy in 2017 amid declining gun sales.
Many of the banks have been under pressure from their customers and some politicians to sever ties with the gun industry. Minneapolis-based Whitebox refinanced a $193 million loan to Remington that had been provided by seven banks, according to the sources. Whitebox, whose assets under management have grown from $2 billion to $6 billion in the last six years, became a major lender to Remington this year, according to people familiar with the transactions that allowed it to build its position. A man aims a Remington firearm at the annual National Rifle Association (NRA) meeting in Dallas, Texas, U.S., May 4, 2018.