Friday, August 11, 2023

Study reveals patients hospitalized with COVID-19 faced nearly twice the rates of death after discharge as patients with flu


Post-discharge risk of death has declined over the course of the pandemic, though inequities persist

Peer-Reviewed Publication

BETH ISRAEL DEACONESS MEDICAL CENTER




BOSTON – As of June 2023, more than 1.1 million Americans have died of COVID-19. Adults older than 65 —who make up just 16 percent of the population—account for more than 75 percent of U.S. COVID-19 deaths and were hospitalized at three times the rate of younger people, highlighting the heightened vulnerability of this population.

In a new study, researchers from the Richard A. and Susan F. Smith Center for Outcomes Research at Beth Israel Deaconess Medical Center (BIDMC) used national Medicare data to characterize the long-term risk of death and hospital readmission after being hospitalized with COVID-19 among beneficiaries 65 years and older. The study, which appears in the BMJ, demonstrates that among individuals who were admitted to the hospital with COVID-19 and were discharged alive, the risk of post-discharge death was nearly twice that observed in those who were discharged alive from an influenza-related hospital admission.

“Since the early days of the pandemic, it has been evident that older adults bear a disproportionate burden of COVID-19 and our study provides several important insights into the longer-term clinical consequences of the disease in this vulnerable population,” said co-senior author Dhruv S. Kazi, MD, MSc, MS, associate director of the Smith Center and director of the Cardiac Critical Care Unit at BIDMC. “We know that patients who require hospital admission for COVID-19 have more comorbidities, more severe initial disease and worse short-term outcomes compared with patients who are asymptomatic or mildly symptomatic, and they may be more vulnerable to late complications of infection. Our goal was to better understand long-term outcomes after patients are discharged from the hospital so as to help tailor support strategies and guide resource allocation for future surges of COVID-19 or during future pandemics.”

The research, led by Smith Center investigators and funded by the National Health, Lung, and Blood Institute, compared outcomes for more than one million Medicare beneficiaries admitted to the hospital with COVID-19 between March 2020 and August 2022 and a historical cohort of nearly 58,000 Medicare beneficiaries admitted to the hospital for influenza between March 2018 and August 2019.

The physician-researchers observed that patients hospitalized for COVID-19 had a higher in-hospital mortality compared with the influenza cohort (17% vs 3%), but this increased risk of death after COVID-19 hospitalization persisted at 30 days, 90 days, and 180 days after discharge. The greatest difference in risk between the two groups being concentrated in the first 30 days after discharge.

Within the COVID-19 cohort, significant differences were found in the 180-day risk of post discharge, death by race and socioeconomic status. Individuals enrolled in both Medicaid and Medicare had higher risk of death. Black patients had a higher risk of death or rehospitalization compared with white patients, largely driven by an increased risk of rehospitalization. In contrast, the risk of death was slightly lower in Black patients compared with white patients.

“Individuals with low income and those from racial/ethnic minority populations have been shown to be at increased risk for adverse events associated with acute COVID-19, including higher rates of infection, hospital admissions and in-hospital death,” said co-senior author Robert W. Yeh, MD, MSc, director of the Smith Center for Outcomes Research at BIDMC. “We found that many of these inequalities persist among a cohort of patients who were discharged alive after COVID-19-related hospital admissions.”

The COVID-19 cohort also experienced a higher risk of hospital readmission at 30 days, and 90 days compared to the flu patients; however, by 180 days, the rate of readmissions were similar between the two groups. The most common reasons for readmission were circulatory conditions, respiratory conditions, sepsis, heart failure and pneumonia. Within the COVID-19 cohort, Black individuals and dual-eligible beneficiaries were more likely to be readmitted than white patients.

Encouragingly, the scientists demonstrated a decline in post-discharge death over the course of the study period. The scientists note that there may be several epidemiological factors that explain this trend: clinicians have made major advances in treating patients hospitalized with severe cases of COVID-19, that vaccination campaigns targeting high-risk patient populations including older adults may have prevented many infections from becoming severe and potentially fatal cases of COVID-19, and that the virus itself may be undergoing changes in virulence.

“While we did find that rates of death following a hospitalization for COVID-19 steadily declined over the course of the pandemic, the substantial in-hospital and early post-discharge risk of death associated with COVID-19 in this sample of Medicare beneficiaries highlights the need for preventative interventions, particularly in patients at increased long-term risk for adverse outcomes,” said lead author Andrew S Oseran, MD, MBA, a research fellow at the Smith Center now at Massachusetts General Hospital. “Our findings suggest the continued need to evaluate clinical and societal interventions that address the glaring inequities in post-discharge outcomes among older adults hospitalized with COVID-19.”

Co-authors included Yang Song, Jiaman Xu, Issa J. Dahabreh, Rishi K. Wadhera, and Tianyu Sun of the Smith Center for Outcomes Research at BIDMC; James A. de Lemos and Sandeep R. Das of the University of Texas Southwestern Medical Center.

This work was supported in part by grants from the National Heart, Lung and Blood Institute (R01HL157530) and Patient-Centered Outcomes Research Institute (PCORI) (ME-1502- 27704). Sun is currently employed by Moderna; his involvement in this project occurred while he was employed at the Richard A. and Susan F. Smith Center for Outcomes Research before his employment at Moderna. Dahabreh is the principal investigator of research agreement between Harvard and Sanofi on statistical methods for vaccine trials with applications to influenza and has received consulting fees from Moderna. The other authors report no financial relationships with any organizations that might have an interest in the submitted work in the previous three years; no other relationships or activities that could appear to have influenced the submitted work.

About Beth Israel Deaconess Medical Center

Beth Israel Deaconess Medical Center is a patient care, teaching and research affiliate of Harvard Medical School and consistently ranks as a national leader among independent hospitals in National Institutes of Health funding. BIDMC is the official hospital of the Boston Red Sox.

Beth Israel Deaconess Medical Center is a part of Beth Israel Lahey Health, a health care system that brings together academic medical centers and teaching hospitals, community and specialty hospitals, more than 4,800 physicians and 38,000 employees in a shared mission to expand access to great care and advance the science and practice of medicine through groundbreaking research and education.

 

UC Irvine biologists find what colors a butterfly’s world


Study identifies first known gene change in sex-differentiated vision


Peer-Reviewed Publication

UNIVERSITY OF CALIFORNIA - IRVINE




Irvine, Calif., Aug. 10, 2023  As butterflies flit among flowers, they don’t all view blossoms the same way. In a phenomenon called sexually dimorphic vision, females of some butterfly species perceive ultraviolet color while the males see light and dark. University of California, Irvine biologists have discovered that in at least one species, the variation results from a vision gene’s jump onto a sex chromosome. It’s the first known finding that this kind of genetic change causes sexually dimorphic vision.

The study appears in Proceedings of the National Academy of Sciences. (Link to study: https://www.pnas.org/doi/10.1073/pnas.2301411120)

The UCI team determined this while investigating the Heliconius butterfly genus. Some of its species see ultraviolet color, an array wider than the visible light spectrum that humans perceive. A substance produced by the opsin gene accounts for these butterflies’ visual capacity. In Heliconius species with sexually dimorphic vision, ultraviolet color perception is only present in females.

In searching for the genetic mechanism behind this difference, the UCI biologists selected as their subject Heliconius charithonia, in which visual capacity is sexually dimorphic. When they finished assembling the first complete genome for this species, they learned that its W – or female – chromosome contained the opsin gene.

“This is the first known instance where dimorphic color vision in animals comes from a single gene moving to a sex chromosome,” said first author Mahul Chakraborty, an assistant project scientist in ecology and evolutionary biology. “Besides the discovery’s scientific significance, it highlights the complexities of automated genetic sequencing and the crucial role of validation.”

He did much of his work on the project while a postdoctoral researcher in the laboratories of co-corresponding authors Adriana Briscoe and J.J. Emerson, both faculty members in the Department of Ecology and Evolutionary Biology.

Previously assembled genomes for Heliconius charithonia were fragmentary. None included the W chromosome, whose highly repetitive code can pose stumbling blocks for automatic sequencing. UCI researchers began their study by automatically sequencing the species genome, but this failed to reveal all expected copies of the opsin gene. Undeterred, they next examined the coding manually.

“I went through every bit of the sequencing,” said Angelica Lara, who was an ecology and evolutionary biology undergraduate when she started working with the investigative team. Lara continued to participate in the project as a postbaccalaureate researcher after earning her degree. “I still couldn’t find the opsin after all that review. Then I realized a part of the code for the W chromosome had not been well formatted, and I believed the opsin had to be located there,” she said.

Lara’s efforts cued Chakraborty to examine that segment more closely. It turned out that the automatic sequencing had dropped that section of the chromosome’s coding, likely stymied by its repetitiveness. Restoring it revealed the opsin gene, and the team confirmed the finding with additional tests.

“Without this manual annotation and investigation, we would have made assumptions that were incorrect and misleading,” said Briscoe, professor of ecology and evolutionary biology. “Now that we’ve made this discovery, we can dig much deeper into the mechanics behind the dimorphism and understanding its purpose.”

Scientists believe the vision difference may be the reason that females and males within some butterfly species feed on different types of flowers. So far, the only other creatures known to have sexually dimorphic vision are certain kinds of primates.

The research was supported by the National Science Foundation, the National Institutes of Health, the UCI Optical Biology Core Facility and Texas A&M University startup funding.

About the University of California, Irvine: Founded in 1965, UCI is a member of the prestigious Association of American Universities and is ranked among the nation’s top 10 public universities by U.S. News & World Report. The campus has produced five Nobel laureates and is known for its academic achievement, premier research, innovation and anteater mascot. Led by Chancellor Howard Gillman, UCI has more than 36,000 students and offers 224 degree programs. It’s located in one of the world’s safest and most economically vibrant communities and is Orange County’s second-largest employer, contributing $7 billion annually to the local economy and $8 billion statewide. For more on UCI, visit www.uci.edu.

NOTE TO EDITORS: PHOTOS AVAILABLE AT
https://news.uci.edu/2023/08/10/uc-irvine-biologists-find-what-colors-a-butterflys-world/

A climate-orchestrated early human love story


Peer-Reviewed Publication

INSTITUTE FOR BASIC SCIENCE

Fig. 1 

IMAGE: PHOTO OF THE REMAINING DENISOVA 11 (DENNY) BONE FRAGMENT FROM DENISOVA CAVE IN RUSSIA, THAT COMES FROM A DAUGHTER TO A NEANDERTHAL MOTHER AND A DENISOVAN FATHER. (PHOTO CREDIT: KATERINA DOUKA, TOM HIGHAM). view more 

CREDIT: INSTITUTE FOR BASIC SCIENCE




A new study published in the journal Science by an international team finds that past changes in atmospheric CO2 and corresponding shifts in climate and vegetation played a key role in determining when and where early human species interbred.

Modern-day people carry in their cells a small quantity of DNA deriving from other human species, namely the Neanderthals and the elusive Denisovans. Back in 2018, scientists announced to the world the discovery of an individual [Figure 1], later nicknamed Denny, who lived 90,000 years ago and who was identified as a daughter to a Denisovan father and a Neanderthal mother [Slon et al. 2018]. Denny, along with fellow mixed-ancestry individuals found at Denisova cave, testifies that interbreeding was probably common among hominins, and not limited to our own species Homo sapiens.

To unravel when and where human hybridization took place, scientists usually rely on paleo-genomic analysis of extremely rare fossil specimens and their even scarcer ancient DNA content. In the new Science paper, the team of climate experts and paleo-biologists from South Korea and Italy pursued a different approach. Using existing paleo-anthropological evidence, genetic data and supercomputer simulations of past climate, the team found that Neanderthals and Denisovans had different environmental preferences. More specifically, Denisovans were much more adapted to cold environments, characterized by boreal forests and even tundra, compared to their Neanderthal cousins who preferred temperate forests and grassland. “This means that their habitats of choice were separated geographically, with Neanderthals typically preferring southwestern Eurasia and Denisovans the northeast”, says Dr. Jiaoyang Ruan, postdoctoral researcher at the IBS Center for Climate Physics (ICCP), South Korea and lead author of the study.

However, according to their realistic computer simulations the scientists found that in warm interglacial periods, when Earth’s orbit around the Sun was more elliptic and northern hemisphere summer occurred closer to the Sun, the hominin habitats began to overlap geographically. “When Neanderthals and Denisovans shared a common habitat, there were more encounters and interactions among the groups, which would have increased the chance of interbreeding”, adds Prof. Axel Timmermann, corresponding author of the study and director of the ICCP and professor at Pusan National University.

The simulation of past habitat overlaps does not only put the first generation Neanderthal/Denisovan hybrid Denny into a climatic context, but it also agrees with other known episodes of interbreeding ~78, 120 thousand years ago. Future paleo-genetic reconstructions can be used to test the robustness of the new supercomputer model-based predictions of potential interbreeding intervals around 210 and 320 thousand years ago.

To further determine the climate drivers of the east-west interbreeding seesaw, the scientists looked more closely at how vegetation patterns changed over Eurasia during the past 400 thousand years. They discovered that elevated atmospheric CO2 concentrations and mild interglacial conditions caused an eastward expansion of temperate forest into central Eurasia which created dispersal corridors for Neanderthals into Denisovan lands. “It is as if glacial-interglacial shifts in climate created the stage for a unique and long-lasting human love story, whose genetic traces are still visible today”, comments Dr. Ruan.

One of the key challenges the researchers faced in their study was to estimate the preferred climatic conditions for Denisovans. “To deal with the very sparse Denisovan dataset, we had to devise new statistical tools, which could also account for known ancestral relationships amongst human species”, says Prof. Pasquale Raia from University of Naples, Federico II in Italy, co-author of the study. “This allowed us for the first time to estimate where Denisovans could have lived. To our surprise, we found that, apart from areas in Russia and China, also northern Europe would have been a suitable environment for them”, he adds [Figure 2].

Whether Denisovans ever lived west of the Altai mountains is unknown; but it can be tested using large-sample genetic analyses of Denisovan ancestry in European populations. Such analysis is expected to shed new light on the relationship between early dispersal, habitat encroachment and human genetic diversification.

Illustration of Neanderthal (redscale) /Denisovan (greenscale) preferred habitats. Potential interbreeding areas in Central Asia and northern Europe are indicated by overlapping colors and baby-shapes.

CREDIT

Institute for Basic Science

 

Extreme cooling ended the first human occupation of Europe


Peer-Reviewed Publication

UNIVERSITY COLLEGE LONDON

Extreme cooling ended the first human occupation of Europe 

VIDEO: VIDEO HIGHLIGHTING HOW PALEOCLIMATE EVIDENCE SHOWS THAT AROUND 1.1 MILLION YEARS AGO, THE SOUTHERN EUROPEAN CLIMATE COOLED SIGNIFICANTLY AND LIKELY CAUSED AN EXTINCTION OF EARLY HUMANS ON THE CONTINENT, ACCORDING TO A NEW STUDY LED BY UCL RESEARCHERS. view more 

CREDIT: UCL




Paleoclimate evidence shows that around 1.1 million years ago, the southern European climate cooled significantly and likely caused an extinction of early humans on the continent, according to a new study led by UCL researchers.

Published in the journal Science, the team of researchers discovered the occurrence of previously unknown extreme glacial conditions around 1.1 million years ago. The glacial cooling pushed the European climate to levels beyond what archaic humans could tolerate, emptying the continent of human populations.

The oldest known human remains in Europe have previously been recovered from Iberia and suggest that early humans had arrived from southwest Αsia by about 1.4 million years ago. The climate around that time would have generally been warm and wet, punctuated by mild cold periods. Up to now, the prevailing theory has been that once humans arrived, they were able to survive through multiple climate cycles and adapt to increasingly harsh conditions after 900,000 years ago.

Senior author Professor Chronis Tzedakis (UCL Geography) said: “Our discovery of an extreme glacial cooling event around 1.1 million years ago challenges the idea of continuous early human occupation of Europe.”

Paleoclimate scientists from UCL, University of Cambridge and CSIC Barcelona analysed the chemical composition of marine micro-organisms and examined the pollen content in a deep-sea sediment core recovered from off the coast of Portugal. This revealed the presence of abrupt climate changes that culminated in an extreme glacial cooling, with ocean surface temperatures off Lisbon dropping below 6°C and semi-deserts expanding on the adjacent land.

Lead author Dr Vasiliki Margari (UCL Geography) said: “To our surprise, we found that this cooling at 1.1 million years ago was comparable to some of the most severe events of recent ice ages.”

Co-author Professor Nick Ashton of the British Museum said: “A cooling of this magnitude would have placed small hunter-gatherer bands under considerable stress, especially since early humans may have lacked adaptations such as sufficient fat insulation and also the means to make fire, effective clothing or shelters.”

To assess the climate impact on early human populations, co-corresponding author Professor Axel Timmermann and his team from the IBS Center for Climate Physics at Pusan National University ran a climate simulation on their supercomputer Aleph to capture the extreme conditions during this time. Combining the output of the simulation with fossil and archaeological evidence of human occupation in southwest Eurasia, the team then developed a human habitat model, which predicts how suitable the environment was for early human occupation.

Professor Axel Timmermann said: “The results showed that 1.1 million years ago climate around the Mediterranean became too hostile for archaic humans.”

Together, the paleoclimate data and human habitat model results indicate that Iberia, and more generally southern Europe, was depopulated during the Early Pleistocene. An apparent lack of stone tools and human remains over the next 200,000 years further raises the possibility of a long-lasting hiatus in European occupation.

Co-author Professor Chris Stringer of the Natural History Museum in London said: “According to this scenario, Europe may have been recolonized around 900,000 years ago by more resilient humans with evolutionary or behavioural changes that allowed survival in the increasing intensity of glacial conditions.”

The research was led by scientists at UCL Geography and the IBS Center for Climate Physics, Pusan National University, South Korea in partnership with researchers from the Cambridge University, CSIC Barcelona, the Natural History Museum, London, the British Museum and the UCL Institute of Archaeology.

 

Notes to Editors

For more information or to speak to the researchers involved or to get a copy of the paper, please contact Michael Lucibella, UCL Media Relations. T: +44 (0)753 941 0389, E: m.lucibella@ucl.ac.uk

Margari, V., Hodell, D.A., Parfitt, S.A., Ashton, N.M., Grimalt, J.O., Kim, H., Yun, K.-S., Gibbard, P.L., Stringer, C.B., Timmermann, A. & Tzedakis, P.C. (2023) ‘Extreme glacial cooling likely led to hominin depopulation of Europe in the Early Pleistocene’ will be published in Science on Thursday 10 August 2023, at 19:00 (7:00 pm) British Summer Time / 14:00 (2:00 pm) U.S. Eastern Time and is under a strict embargo until this time.

The DOI for this paper will be10.1126/science.adf4445

 

Additional material

Video: https://www.dropbox.com/scl/fi/by3uu2i4rb5hd05grtw2k/UCL-Vas-v9.mp4?rlkey=kpchx03auqvkmpde4p7iyqqpn&dl=0

More information, including a copy of the paper, can be found online at the Science press package at https://www.eurekalert.org/press/scipak/

 

About UCL – London’s Global University

UCL is a diverse community with the freedom to challenge and think differently.

Our community of more than 41,500 students from 150 countries and over 12,500 staff pursues academic excellence, breaks boundaries and makes a positive impact on real world problems.

We are consistently ranked among the top 10 universities in the world and are one of only a handful of institutions rated as having the strongest academic reputation and the broadest research impact.

We have a progressive and integrated approach to our teaching and research – championing innovation, creativity and cross-disciplinary working. We teach our students how to think, not what to think, and see them as partners, collaborators and contributors.  

For almost 200 years, we are proud to have opened higher education to students from a wide range of backgrounds and to change the way we create and share knowledge.

We were the first in England to welcome women to university education and that courageous attitude and disruptive spirit is still alive today. We are UCL.

www.ucl.ac.uk| Follow @uclnews on Twitter | Watch our YouTube channel | Listen to UCL podcasts on SoundCloud | Find out what’s on at UCL Minds | #MadeAtUCL

Find out how UCL is helping lead the global fight against COVID-19 www.ucl.ac.uk/covid-19-research

Soil microbiome, Earth’s ‘living skin’ under threat from climate change

Novel approach to measuring microbe activity in wetted soil leads to better understanding of vulnerability, researchers report

Peer-Reviewed Publication

PENN STATE

Researcher collects cores of biocrust 

IMAGE: PENN STATE GRADUATE STUDENT RYAN TREXLER COLLECTS CORES OF BIOCRUST FROM THE FIELD BEFORE BRINGING THEM BACK TO THE LAB TO STUDY. view more 

CREDIT: PENN STATE



UNIVERSITY PARK, Pa. — Using a novel method to detect microbial activity in biological soil crusts, or biocrusts, after they are wetted, a Penn State-led research team in a new study uncovered clues that will lead to a better understanding of the role microbes play in forming a living skin over many semi-arid ecosystems around the world. The tiny organisms — and the microbiomes they create — are threatened by climate change.  

The researchers published their findings in Frontiers of Microbiology.

“Biocrusts currently cover approximately 12% of Earth’s terrestrial surface, and we expect them to decrease by about 25% to 40% within 65 years due to climate change and land-use intensification,” said team leader Estelle Couradeau, Penn State assistant professor of soils and environmental microbiology. “We hope this work can pave the way to understanding the microbial functions supporting biocrust resilience to the rapidly changing climate patterns and more frequent droughts.”

Biological soil crusts are assemblages of organisms that form a perennial, well-organized surface layer in soils. They are widespread, occurring on all of the continents wherever a shortage of water limits the growth of common plants, allowing light to reach bare soil. But there is still sufficient water to support the growth of microorganisms that perform valuable ecosystem services such as taking carbon and nitrogen from the air and fixing them in the soil, recycling nutrients and holding soil particles together, which helps prevent dust.

That soil-stabilizing function — which reduces erosion by providing the means for soil to clump and not break down into dust — is extremely important, according to Couradeau. Her research group, now in Penn State’s College of Agricultural Sciences, has been intensively studying biocrusts for a decade.

“Most dust is generated in drylands, and studies suggest that the presence of biocrusts in drylands greatly reduce the amount of dust that would otherwise make its way into the atmosphere,” she said. “We think losing biocrusts would cause a 5% to 15% increase in global dust emission and deposition — which would affect the climate, environment and human health.”

In the semi-arid regions where biocrusts exist, the organisms — tiny mosses, lichens, green algae, cyanobacteria, other bacteria and fungi — may experience just a few rain or snow events a year, explained Ryan Trexler, a doctoral degree candidate in the Intercollege Graduate Degree Program in ecology and in biogeochemistry, who spearheaded the research.

“When the soil is dry, for the most part, the microbes in the soil are dormant, not doing much,” he said. “But as soon as they sense water, they're resuscitated very quickly, within seconds to minutes. And they are actively making chlorophyll and fixing carbon and nitrogen until the soil is dry again — and then the microbes go dormant again. They go through cycles of activity every time it rains.”

To study biocrusts, the researchers took samples from three plots of undisturbed, cyanobacteria-dominated biocrusts located on the Colorado Plateau near Moab, Utah. Biocrust samples were taken in fall following rain that wetted the soil sufficiently to activate the microbes. The samples were subsequently dried and stored in the dark and then rewetted much later in the research.

“We sampled what we call ‘a cold desert,’ because it’s very arid, but in the winter, it sometimes snows,” Trexler said. “So, it's not as hot as many other arid places, but still plants cannot thrive there because there's not enough water. And so, the only community that we find in soils at the site are microbial.”

To determine which microorganisms are active within soil communities, the researchers coupled bioorthogonal non-canonical amino acid tagging — known as BONCAT — with fluorescence-activated cell sorting. BONCAT is a powerful tool for tracking protein synthesis on the level of single cells within communities and whole organisms, while fluorescence-activated cell sorting sorts cells based on whether they are producing new proteins.

The researchers combined these processes with shotgun metagenomic sequencing, which allowed them to comprehensively sample all genes in all organisms present in biocrust samples. They applied this method to profile the diversity and potential functional capabilities of both active and inactive microorganisms in a biocrust community after being resuscitated by a simulated rain event. The researchers found that their novel approach can discern active and inactive microorganisms in wetted biocrusts.

The active and inactive components of the biocrust community differed in species richness and composition at both four hours and 21 hours after the wetting event, the researchers reported.

Contributing to the research were Marc Van Goethem, Lawrence Berkeley National Laboratory, and King Abdullah University of Science and Technology, Jeddah, Saudi Arabia; Danielle Goudeau, Nandita Nath, Trent Northen and Rex Malmstrom, Lawrence Berkeley National Laboratory, U.S. Department of Energy Joint Genome Institute.

The U.S. Department of Energy supported this research.

 

A cross-section of biocrust taken by confocal scanning laser microscopy. Soil particles are visible as various shades of gray, while the bundles of cyanobacterial filaments (fluorescent red) are situated between them.

Puerto Rico’s Bankrupt Utility Strikes Tentative Deal With Bondholders


Michelle Kaske
Fri, August 11, 2023 

(Bloomberg) -- Puerto Rico’s bankrupt power utility reached a tentative agreement with a “substantial number” of its bondholders, according to a federal oversight board, and received another week to finalize a potential deal to reduce nearly $9 billion of debt.

US District Court Judge Laura Taylor Swain on Thursday granted a request by the federally appointed board to postpone to Aug. 18 a deadline to file an amended debt-cutting plan. The board, which manages the bankruptcy, and some bondholders are working on the specific terms of a restructuring support agreement, according to the board’s motion seeking an extension.

A potential debt deal between Puerto Rico’s Electric Power Authority, called Prepa, and its creditors would be a long-awaited and positive development in the utility’s six-year bankruptcy, which has been prolonged by hurricanes, the commonwealth’s own debt restructuring and the pandemic.

“The oversight board is pleased to report it has reached an agreement in principle with a substantial number of holders of Prepa bonds to settle their respective claims against Prepa,” lawyers for the board wrote in Thursday’s court filing.

Not all investors are on board yet. GoldenTree Asset Management says it hasn’t been invited to or participated in any settlement discussions, according to a statement it filed Thursday to the court following Swain’s approval of the Aug. 18 deadline. GoldenTree held $1 billion of Prepa debt as of Feb. 16, according to its most recent disclosure filing to the court.

“We believe that the efforts of the oversight board to cause the debtor to try to walk away from $8.4 billion of revenue bonds on a nonconsensual basis, and to buy plan support from some, but not all bondholders, through improper classification and disparate treatment, is wasteful and will not result in the timely or efficient conclusion of this process that all purport to desire,” lawyers for GoldenTree wrote in its filing Thursday.

GoldenTree has been part of an ad hoc group of Prepa bondholders, but it recently hired White & Case to represent it, an indication that the firm’s strategy may differ from the other investors in the group.

Negotiations between the oversight board and bondholders increased after Swain in June limited to $2.38 billion the amount of utility net revenue that bondholders have a claim to. That amount is a sliver of Prepa’s outstanding bonds.

Swain originally asked the board to submit its amended debt plan by July 14. She has postponed that deadline as the board has claimed that it continues to find agreement with creditors.

Most Read from Bloomberg Businessweek
QUEBEC INC.
Desmarais Family’s Sagard Pushes for Growth With Private Retail Funds

Derek Decloet
Fri, August 11, 2023 


(Bloomberg) -- Sagard Holdings, the alternative asset manager controlled by Canada’s billionaire Desmarais family, is working to boost sales of its private-asset funds to retail investors.

Sagard struck a deal last month to bring on Bank of Montreal and Abu Dhabi sovereign wealth fund ADQ as minority investors in the firm. When complete, the transaction will dilute Power Corp. of Canada’s ownership of Sagard to just over 50%, the company disclosed Friday. But it will mean new avenues of growth, Power Chief Executive Officer Jeffrey Orr said.

“The BMO partnership might help” with retail distribution, Orr told analysts on Friday. “I think a lot of the growth over the next decade is going to come not just from institutions, but it’s going to come from high net worth, ultra-high net worth and retail channels.”

Sagard and its sister company, Power Sustainable, offer a variety of investment strategies, including private equity, private credit, green energy and real estate funds. Sagard also has a venture capital arm that’s focused on financial-technology startups.

The two alternative managers remain a small part of Montreal-based Power, which derives the bulk of its profits from control of one of Canada’s largest insurance companies, Great-West Lifeco Inc., and from mutual fund and wealth-management firm IGM Financial Inc.

Read More: Billionaire Desmarais Family Quietly Reshapes a Financial Empire

Sagard and Power Sustainable had about C$22 billion ($16.4 billion) of assets under management, including unfunded commitments, as of June 30. It’s not large enough yet to be profitable; the firms posted a combined C$18 million operating loss in the second quarter.

But that will change as they draw in more outside investors, Orr said in response to analysts’ questions.

“We have said we are all about creating value — and, ultimately, profitability — in our investing platforms, but we were looking to do that through third-party capital,” he said.

Power shares rose as high as C$38.98 on Friday in Toronto, the highest price since April 2022.

Sagard is led by Paul Desmarais III, the grandson of the late Paul Desmarais, who took over Power more than 50 years ago and used it to gain control of Great-West, IGM and a large portfolio of financial, media and industrial assets. Power has a stock market value of about C$26 billion.

 Businessweek

Trucking Company Yellow Is Having an Odd Bankruptcy With New Loan Offers Pouring In

Jonathan Randles
Fri, August 11, 2023


(Bloomberg) -- As far as liquidations go, trucking company Yellow appears to be having a particularly good one.

After meme traders piled into the stock just as the firm was cratering, investment funds and a rival trucker are sparring for the opportunity to finance its wind-down.

While the nearly 100-year-old firm’s core shipping business has collapsed, it still boasts lucrative assets worth an estimated $2.1 billion — helping Yellow get the kind of financing bids that it struggled to raise before a recent Chapter 11 filing.

Yellow is scheduled to update the bankruptcy court on its efforts to secure alternative financing at a Friday hearing.

Its loan from existing lenders led by Apollo Global Management carries a beefy 17% interest rate. Yellow could also be on the hook for $32 million in fees if the sale drags on for months. The loan has another provision to further protect about $501 million in outstanding debt owed to Apollo and other lenders.

The good news for the trucker: Hedge fund MFN Partners LP, its largest shareholder, has offered to loan the same amount of money at the same interest rate but lower fees, according to Yellow lawyer Patrick J. Nash. Rival trucking firm Estes Express Lines has floated a proposal on more favorable terms, offering up-to $230 million at 2% lower-interest and lower fees, Nash said.

Nash said he was “cautiously optimistic” that Yellow could be close to finalizing an alternative financing by Friday.

“The prospect of multiple bids is a good thing, in my view, despite the irony that they’re funding a business that’s completely shutting down,” said David Skeel, a professor at University of Pennsylvania Carey Law School.

Lucrative Assets

The trucker is in demand thanks to its substantial real estate portfolio with about 300 service centers, 42,000 trailers and 12,700 tractors — assets Yellow told a bankruptcy judge should fetch more than enough to fully repay its lenders. It famously has a $700 million loan from the US government during the pandemic rescue.


Nash said the company’s service centers are located throughout the country, many in fully-developed urban areas, where such terminals are no-longer being built. Industry experts have described the bankruptcy as a “once-in-a-lifetime opportunity” to secure such a large volume of these types of assets, Nash said.

Prospects are so promising that Yellow should also be able to repay additional debt to fund the Chapter 11 case, he said.

Still, existing lenders expressed doubt Wednesday over whether alternative financing will come to fruition. An Apollo lawyer said the firm hadn’t reviewed Estes’ proposal and expressed concern that Yellow might draw out the liquidation and negatively impact the value of its collateral.

Most Read from Bloomberg Businessweek
Meloni Muscles In on KKR’s Telecom Italia Deal, Taking Stake

Daniele Lepido and Alessandra Migliaccio
Fri, August 11, 2023 



(Bloomberg) -- The Italian government agreed with US private equity firm KKR & Co. to take a stake of up to 20% in Telecom Italia SpA’s network business as Prime Minister Giorgia Meloni asserts greater state oversight of strategic assets.

The U.S. private equity firm signed a preliminary deal to include the government in its €23 billion ($25.3 billion) bid for the former phone monopoly’s network, the finance ministry said a statement late Thursday. A decree will complete the process.

The announcement — Meloni’s second surprise intervention in a week after she imposed a windfall tax on banks — was seen as a positive news by Telecom Italia’s largest shareholder, Vivendi SE, who had earlier opposed the sale.

The opening of a serious dialog with Vivendi is necessary to reach a feasible solution, according to people close to the French media-conglomerate. For Vivendi, a discussion is now essential to find the best possible outcome, the people added. The French media conglomerate has valued the network at about €30 billion.

The government’s “direct and active” intervention makes explicit “the strong and broad political support for the transaction,” Alberto Gegra, an analyst at Equita, wrote in a note to clients.

Telecom Italia shares rose as much as 5.6% in Milan trading to their highest since April, boosting the company’s market value to €6.2 billion.

Meloni has signaled that she considers Telecom Italia’s network a strategic asset that must retain a degree of public oversight. The government has the right to veto deals involving such assets, and Rome’s desire to safeguard the company’s 40,000 employees means that any offer without state backing would face significant hurdles.

The deal with KKR will provide “a decisive role for the government in defining strategic choices,” the economy ministry said in its statement.

KKR is also adding infrastructure fund F2i SGR SpA to its bidding group, boosting the numbers of Italian investors in the consortium.


Telecom Italia put its network business up for sale earlier this year in an effort to reduce its gross debt of more than €30 billion. The business has been grappling with a complex mix of high labor costs and the need for ever-growing investments to modernize its network infrastructure.

--With assistance from Antonio Vanuzzo and Chiara Remondini.

 Bloomberg Businessweek