19 Jan, 2021

LCD News Today: Jan. 19, 2021

Primary leveraged loan market

Arrangers today launched nearly a dozen transactions, including several $2 billion plus size repricing transactions for Ultimate Fighting Championship Ltd., ADT Inc. and The Dun & Bradstreet Corp. Today's repricing launches also included a $1 billion plus size loan for Inmarsat Inc., Howden, Cambrex Corporation, and Innovative XCessories & Services LLC. Arrangers also launched add-on deals for Kestra Financial Holdings LP and Highline Aftermarket Acquisition LLC and a recapitalization deal for RV Retailer LLC.

Elsewhere, INEOS Quattro cut pricing across its cross-border, dual-currency five-year term loan that was also upsized to €2.9 billion, from €2.6 billion. The loan is now guided at L+300, with a 0.5% Libor floor and 99.25-99.5 original issue discount, or OID, versus previous talk at L+325-350, with a 99-99.5 OID. The euro-denominated tranche narrowed to E+300, with a 0% floor and a 99.25-99.5 OID, from E+325-350, with a 99-99.5 OID. Proceeds from the loans and an adjoining bond issuance will be used to finance the acquisition of BP's global petrochemicals business, refinance its existing Inovyn term loan and fund the full amount of deferred consideration owed to BP.

Price talk on the $435 million first-lien term loan backing the acquisition of Protective Industrial Products Inc. by Odyssey Investment Partners also tightened to L+400, with a 0.75% floor, and a 99.5 OID, from L+425 and a 99 OID at launch. Additional financing includes a $75 million, five-year revolver and a $160 million second-lien term loan that is being privately placed.

And Jane Street Group LLC revised the transaction for its $300 million fungible add-on term loan B so that the company will now refinance its existing $1.573 billion first-lien term loan alongside the add-on term loan, with the tranche size totaling $1.873 billion pro forma for the add-on. Price talk on the seven-year term loan has been set at L+275, with a 0% Libor floor. The new money add-on is offered at an original issue discount of 99.75, while existing lenders will receive a 10-basis-point amendment fee. The entire tranche will have six months of 101 soft call protection. Proceeds from the add-on term loan will be used for general corporate purposes.

Primary leveraged loan market stories/links

UFC sets talk for repricing of $2.304B, $150M term loans; commits due Jan. 22

ADT sets guidance on $2.77B repriced term loan

Dun & Bradstreet sets lender call to launch repricing of $2.811B term loan

Cambrex sets launch of repricing for $928.5M term loan; commitments due Jan. 21

Innovative XCessories & Services sets call for $600M term loan repricing

Kestra Financial to launch $50M add-on term loan; commits due Jan. 26

Protective Industrial Products tightens talk on $435M term loan for buyout

Jane Street to refinance $1.573B term loan alongside $300M fungible add-on

Secondary leveraged loan market

The secondary loan market retained a slightly firmer tone to start off the week as attention focused on the increasing number of new-issue deals entering the secondary market. The S&P/LSTA Leveraged Loan Index returned 0.04% in today's session.

In allocations, nThrive TSG completed its upsized $500 million covenant-lite first-lien term loan due 2028 (L+375, 0.75% Libor floor) that priced tight of talk at an OID of 99.5 via a Deutsche Bank-led arranger group before breaking to a 99.75/100.5 market. Proceeds from the transaction will be used to finance the buyout of nThrive Inc.'s Technology Solutions Group business by Clearlake Capital.

Elsewhere, Sotera Health Co.'s repriced $1.763 billion term loan B due December 2026 has ticked up to 100.25/100.75, after entering the aftermarket at 100.125/100.625 on Friday. The term loan priced tight to talk at L+275, with a 0.50% Libor floor and an issue price of par. The transaction lowered the spread from L+450, with a 1% Libor floor.

Also gaining in today's market was Pike Corp.'s $730 million, seven-year covenant-lite term loan B due 2028 (L+300, 0% Libor floor), which ticked up to a 100.5/101 level, after breaking at 100.25/100.75 on Friday. The term loan, which will support Lindsay Goldberg's acquisition of a 50.1% stake in the company and to refinance the issuer's existing term loan, priced tight to talk at an OID of 99.875 via a Morgan Stanley-led arranger group.

Meanwhile, Women's Care Holdings Inc completed its $360 million first-lien and $120 million second-lien covenant-lite term loans that back the buyout of the company by BC Partners on Friday. The term loans today held at their break prices of 99.5/100 for the first-lien and 98.5/99.5 for the second-lien term loan, after pricing at OIDs of 99 and 98 via a Jefferies-led arranger group on Friday. The term loans priced in line with initial price talk for the facilities.

Finally, UKG's $300 million fungible add-on and concurrent repricing of its existing $2.938 billion covenant-lite first-lien term loan due May 2026 was quoted at 100.625/101.125 today, after being quoted at 100.5/101 on Friday after pricing. The term loan priced at L+325, with a 0.75% Libor floor and an offer price of par via lead arranger Credit Suisse. Proceeds from the add-on will be used to refinance the issuer's second-lien term loan.

Secondary leveraged loan market stories/links

NThrive TSG wraps $500M term loan for buyout by Clearlake Capital; terms

Sotera Health wraps $1.763B term loan repricing; terms

Pike completes $730M term loan tight to talk; terms

UKG completes $2.94B term loan repricing, $300M add-on; terms

Primary high-yield market

The U.S. high-yield market was poised to wrap Tuesday's session with one of the largest single-day issuance totals on record. Via 11 tranches, nearly $9 billion was slated to clear by the close as companies continue to take advantage of lower borrowing costs. Through Jan. 15, the average new-issue yield for the month's completed prints was logged as 5.03%, after closing December 2020 with a 5.84% average, according to LCD.

At $31.9 billion, year-to-date volume is currently outpacing the previous year by 58%.

Community Health Systems Inc. is included in the hefty intraday sum with expected pricing for $1.775 billion of eight-year junior-priority secured notes. The deal was upsized from $750 million, with price talk circulating in the 7% area. Proceeds will be used to refinance the company's junior-priority secured notes due 2023. Moody's today upgraded ratings on Community Health, citing the extended maturity runway and lessened refinancing risks as factors.

Hilton Worldwide Holdings Inc., via issuing entity Hilton Domestic Operating Co. Inc., was also on the docket with 11-year senior notes guided in the 3.75% area. Proceeds of the $1.5 billion tranche will be used along with available cash on hand, to redeem all of its 5.125% senior notes due 2026.

Sizable refinancing efforts were also on the docket for Uniti Group Inc., Howard Hughes Corp. and Targa Resources Partners LP. The session's full slate of pricings includes pitches for PrimeSource Building Products Inc., Resolute Forest Products Inc., Commercial Metals Co., MEG Energy Corp. and Indigo Natural Resources LLC.

Wednesday’s calendar currently appears slim, with Truck Hero Inc. the single issuer expected to wrap its proposed debt.

Primary high-yield market stories/links

High-yield forward calendar

Hilton floats price talk for $1.5B bond offering

Community Health Systems guides upsized junior-priority secured notes offering

MEG Energy prints senior unsecured notes at par to yield 5.875%; terms

Indigo Natural Resources prints notes at par to yield 5.375%; terms

Commercial Metals places 10-year notes at par to yield 3.875%; terms

Howard Hughes guides $1.3B, 2-part bond offering

Resolute Forest Products sets talk for $300M bond offering; pricing today

Colgate Energy Partners readies $300M bond offering

PrimeSource firms pricing for upsized 8-year notes at 5.625%

Targa Resources sets talk for proposed notes, boosts tranche size to $1B

Secondary high-yield market

The high yield secondary market started the abbreviated week on a firm footing as stocks rebounded from Friday's sell-off, but with no macro news of note, volumes remained thin. The focus remained on supply as almost $9 billion of new paper hit the tape today. Sources report no signs of indigestion, with last week's deals still well bid.

AMC Entertainment Holdings Inc. bonds surged to fresh highs after the company revealed it had issued $100 million in 15% cash/17% payment-in-kind toggle first-lien secured notes due 2026 to help keep it afloat. The financing was the product of a deal AMC struck in December with Mudrick Capital Management. The August issue of 12% cash/PIK second-lien notes due June 15, 2026, garnered almost 5 points on the day, to trade at a fresh high of 34, while the 10.5% first-lien notes due 2026 closed out at a new high at 84.

Bonds backing Staples Inc. bobbled after Office Depot rejected the company's unsolicited buyout offer but countered with a proposal to sell just its consumer-facing retail and e-commerce business or entering into a joint venture that would afford the same cost savings as an outright merger but attract less regulatory scrutiny. Staples' 7.5% secured notes due 2026 pared an early half-a-point loss to an eighth of a point, to close at 103.75, having last week come within a whisker of regaining its October 2019 high of 105.25. The SPLS 10.75% senior unsecured notes due 2027, on the other hand, gained half a point to test par before ending the day at 99.75.

Netflix Inc. bonds edged up heading into the close as the company announced it had surpassed 200 million subscribers and achieved $25 billion in annual revenue. The 6.375% notes due 2029 posted the biggest gains so far, advancing three-quarters of a point, to 124 on the highs — less than a point off their December highs.

Recent eight-year offerings from TransDigm Group Inc. and SBA Communications Corp. drove the day's meager trading volumes, with the former's $1.2 billion of 4.625% senior subordinated notes garnering a quarter of a point, to trade as high as 100.75, while the SBAC 3.125% notes never ventured much above par.

High-grade market

Nonfinancial issuers remained on the sidelines as Yankee financials remain the biggest source of deal volumes thus far in January. Today's pricings were across deals for Crédit Agricole SA ($1.5 billion), BNP Paribas SA ($1.25 billion), Bank of Montreal ($1 billion), Air Lease Corp. ($750 million), and National Health Investors Inc. ($400 million). Not counting toward the total today was a $3.51 billion hybrid offering of split-rated perpetual (non-call five) preferred stock for Wells Fargo & Co., marking the first domestic money-center bank to tap the markets in the wake of earnings.

While the high-yield marketplace bristles with deal announcements, the high-grade primary continued at a deliberate pace today in the shadow of earnings. Today's $4.9 billion issuance total was across five IG bond deal announcements (excluding SAS and hybrid deals), marking the fifth session of the last six to produce a five-deal docket, bracketing Friday's no-print session. Syndicate desks came into the week projecting an issuance total in the same area as last week's approximately $25 billion output.

Meanwhile, the pipeline for potential M&A-driven bond offerings continues to build. Citrix Systems Inc. disclosed $1.45 billion in bridge financing from J.P. Morgan backing Citrix's $2.25 billion acquisition of Wrike.

High-grade market stories/links

Air Lease adds to aircraft lessor issuance with 2024 notes

BNP Paribas places 2041 Tier 2 notes

National Health Investors prices 2031 notes for refinancing purposes

Citrix Systems eyes $1.45B bridge for Wrike acquisition

Bank of Montreal places bail-in 2027 notes below 1%

Distressed market stories/links

American Achievement files Chapter 11, seeking to stymie lender boardroom gambit

Fridson: High yield sector rotation trade may still have room to run

Affordable Care Holdings upgraded to Caa1 at Moody's

AMC Entertainment closes $100M debt financing with Mudrick Capital Management

Peabody Energy extends exchange offer early tender deadline as ratings set