Primary leveraged loan market
The leveraged loan market had its busiest day of the new year for deal launches as new leveraged buyout and M&A announcements were accompanied by a rash of opportunistic transactions. These have included yet more repricings as well as dividend deals and other refinancing efforts, such as incremental first-lien term loans that are earmarked to pay down second-lien debt.
On the LBO front, a Credit Suisse-led arranger group set price talk on the $1.234 billion covenant-lite first-lien term loan financing backing the buyout of TricorBraun Inc. by Ares Management and Ontario Teachers' Pension Plan Board. Price talk for the seven-year term loan is L+350-375, with a 0.75% Libor floor, offered at 99.5. The financing comprises a $1.034 billion funded term loan and a $200 million delayed-draw tranche. Financing for the buyout will also include a $140 million asset-based loan revolver and $376 million of second-lien notes that will be privately placed.
Also, the $1.26 billion first-lien term loan that supports the acquisitions of Foundation Building Materials LLC and the interior products business of Beacon Roofing Supply by American Securities also launched. The seven-year covenant-lite TLB is talked at L+350-375, with a 0.5% floor and an issue price of 99.5. Credit Suisse is left lead on the deal.
Arrangers also announced price guidance for the cross-border term loan B financing supporting the acquisition of NielsenIQ by Advent International. The transaction includes a $950 million dollar-denominated term loan and a $650 million-equivalent tranche denominated in euros. Price talk for the seven-year covenant-lite TLBs is L/E+450-475, with a 0.5% floor on the dollar tranche and a 0% floor on the euro. Both loans are offered at an issue price of 99. BofA Securities is left lead on the dollar tranche and UBS is left on the euros.
Primary leveraged loan market stories/links
Foundation Building Materials offers price talk for $1.26B term loan
TricorBraun launches $1.234B term loan financing backing buyout
NielsenIQ lays out price talk for cross-border term loan financing for buyout
PAREXEL International launches $2.3B term loan for refinancing
Sotheby's launches $461M term loan repricing; commitments due Jan. 27
ZoomInfo Technologies sets talk for $756.35 million term loan repricing
Asurion launches $1.25B 1st-lien, $1.89B 2nd-lien term loans for refinancing
Symplr sets price talk for $65M add-on term loan backing acquisition
MHS sets talk for $140M add-on term loan backing acquisition
Buckeye Partners launches $2.233B term loan repricing; lender call today
Aldevron launches $834M term loan repricing, $40M add-on; commits due Jan. 28
PDC Wellness & Personal Care sets talk for $183M incremental term loan
Pathway Vet Alliance preps Jan. 26 call to launch $1.01B term loan repricing
Altium Packaging launches $1.05B term loan; commitments due Jan. 29
Jefferies Finance sets price talk on repricing transaction; commits due Jan. 29
Cox Media Group to reprice existing term loans
Big Ass Fans sets lender call to launch $30M add-on term loan for dividend
Rough Country launches $85M incremental term loan; commitments due Jan. 28
Zelis Healthcare set to reprice $1.485B term loan; lender call Jan. 26
IntraFi Network readies $140M incremental term loan; sets Jan. 26 lender call
Rackspace sets lender call for Jan. 26
Navitas Midstream Midland Basin to launch $265M add-on term loan
Time Manufacturing to launch $135M incremental term loan for M&A
System One accelerates commitment deadline for $280M term loan
NCR Corp. eyes $1.7B add-on TL, $1B bridge for Cardtronics buy
Franchise Group eyes $1.3B term loan for Pet Supplies Plus acquisition
Aspen Dental to reprice $1.2B term loan B-2; commitments due Jan. 27
USI looks to reprice, consolidate 2 existing term loans
Secondary leveraged loan market
The secondary loan market was little changed today after posting its first loss of the year after the S&P/LSTA Leveraged Loan Index returned negative 0.03% on Jan. 22.
In company news today, AMC Entertainment Holdings Inc.'s approximately $1.97 billion term loan B due April 2026 (L+300, 0% Libor floor) was one of the biggest gainers after the company said it has secured $917 million in new capital, taking talk of an imminent bankruptcy "completely off the table." The loan was quoted at an 80.75/82.25 level this morning, from about 98.5/80 at the end of last week and 73/74.5 at the beginning of last week. The company raised $506 million worth of equity and debt and signed a commitment letter to receive $411 million of incremental debt capital.
Ultimate Fighting Championship Ltd.
Calpine Corp. completed the repricing of its $936 million term loan B-9 due August 2026 today at talk via a Credit Suisse-led arranger group. The loan priced at L+200, with a 0% floor and an issue price of par. The company lowered the spread on the loan from L+225.
On the buyout front, Careismatic Brands — formerly known as Strategic Partners Inc. — wrapped its $605 million first-lien and $110 million second-lien term loans on Jan. 22. The loans back the acquisition of the company by Partners Group from New Mountain Capital. The seven-year term loan B priced tight of talk at L+325, with a 0.5% floor and an original issue discount, or OID, of 99.75 via a UBS-led arranger group before freeing to a 100/100.75 market. The second-lien term loan priced at L+725, with a 0.5% floor and an OID of 99 before being quoted at 100/101 on the break. During syndication, $30 million was shifted to the first-lien tranche to the second-lien tranche.
Secondary leveraged loan market stories/links
AMC Entertainment debt soars as company claims to have staved off bankruptcy
UFC Holdings wraps $2.453B term loan repricing; terms
Calpine completes $936M term loan repricing at talk; terms
Careismatic Brands $605M 1st-lien, $110M 2nd-lien term loans allocate; terms
Primary high-yield market
Today's expected $4.4 billion issuance sum has January on track to set a new volume record for the month, according to LCD. The anticipated intraday total comes via seven tranches and boosts the month-to-date tally to $40.3 billion. For reference, 2019's $38.2 billion was the previous top-slot holder. The figure also outshines December's $29.5 billion figure.
NGL Energy Partners LP accounts for a hefty portion of today's volume after printing $2.05 billion of five-year senior secured notes to yield 7.5%. The company will use the proceeds, together with borrowings under a new $500 million asset-based revolving credit facility, to repay and terminate its existing revolving credit facility, to refinance a $250 million first-lien term loan due 2023 and for general corporate purposes. Tranche ratings are BB-/B1.
AMC Networks Inc. was also on track to wrap a $1 billion tranche of eight-year senior notes after doubling the offering's size, sources said. Guidance for the deal was set at 4.25%-4.5%, and proceeds will be used to refinance 2022 and 2024 bond maturities. Ratings are BB/Ba3.
Elsewhere, IPL Plastics Inc. added its name to the list of companies printing bonds to back dividend payments. Initially, the company eyed a $75 million add-on to its 6% senior secured notes due 2028 to fund its acquisition of Leaktite Corp., but after boosting the deal by $25 million, proceeds will now also back a distribution to shareholders. The company last August placed $485 million of the bonds to support its acquisition by Intelligent Packaging Limited Purchaser, an entity controlled by funds managed by Madison Dearborn Partners. In October, the company printed an additional $100 million of the notes for general corporate purposes. IPL Plastics then in December issued senior pay-in-kind, or PIK, toggle notes to back a dividend payment.
US Foods, Inc., Empire Communities Corp., Harvest Midstream I LP, Peninsula Pacific Entertainment LLC also shopped deals today. The calendar remains filled for the week with pitches for Endurance International Group Holdings Inc. (Endure Digital), HC2 Holdings Inc., Aethon United BR LP, Taseko Mines Ltd. and ZoomInfo Technologies Inc. currently underway.
Primary high-yield market stories/links
IPL Plastics prices $100M add-on to 6% secured notes at 102.5; terms
Harvest Midstream places add-on unsecured notes due 2028 at 105.25; terms
Peninsula Pacific Entertainment places add-on 8.5% notes at 106.75; terms
US Foods firms pricing for upsized unsecured bond offering
Empire Communities places add-on 7% notes due 2025 at 105.25; terms
NGL Energy prints secured notes at par to yield 7.5%; terms
AMC Networks circulates price guidance for $500M senior notes pitch
Endure Digital offers $640M of senior notes for buyout
Taseko Mines pitches $325M of secured notes; pricing Wednesday
HC2 Holdings eyes secured bond print to refinance existing debt
Secondary high-yield market
Having wrapped up last week's weighty issuance on a soft note, the high-yield secondary opened a generic quarter-point lower today but held steady at those levels even as equities slipped and borrowers threatened more supply. Risk sentiment was further dinged by indicators that further economic stimulus is weeks, rather than days away.
AMC Entertainment Holdings Inc. remained in focus, with the theater chain's bonds soaring after management said recent fundraising efforts had taken filing for bankruptcy protection "completely off the table." The company's 10% cash/12% PIK second-lien secured notes due 2026 surged 9.5 points, to a fresh high of 53.5, while the concurrent $200 million placement of 10.5% first-lien secured 2026 notes and 5.875% senior subordinated bonds, also due in 2026, garnered 7 points apiece, to trade at 92.5 and 32, respectively.
Bonds backing Cleveland-Cliffs Inc. edged higher on the back of an upbeat revenue outlook. The company's 5.75% bonds due 2025 moved a point higher, to a post-slump high of 102.75, after the steelmaker offered up a consensus-busting revenue guidance range of $2.2 billion to $2.3 billion for the fourth quarter. An adjusted-EBITDA forecast of between $280 million and $290 million was also above Street expectations of $224 million.
Longer-dated quality paper was particularly well bid, traders say, with The Kraft Heinz Co.'s 4.25% notes due 2031 moving up almost 2 points, to a fresh high of 112 and Macy's Inc.'s beaten-down 4.3% senior notes due 2043 gaining 0.625 points, to trade at a post-downturn high of 74.75. Occidental Petroleum Corp.'s 4.1% senior unsecured notes due 2047 garnered 1.25 points, to trade at 85.25, though that is still below the pandemic-era high of 88.5 hit on Jan. 18.
Several oil and gas providers recouped a portion of last week's losses as traders and investors made peace with uncertainty over the impact of the new administration's energy policies. Murphy Oil Corp.'s 5.125% senior notes due 2042, which traded as low as 89 on Jan. 22, were changing hands at 92 on the highs.
Secondary high-yield market stories/linksHigh-yield market holds firm in spite of weighty supply, sliding stocks
High-grade market
As the high-yield primary engine roared, the high-grade issuance effort this week got off to a decidedly slower start. The session produced just one high-grade senior offering, from South Korean financial concern Woori Bank, which today placed $550 million of 0.75% five-year senior notes due Feb. 1, 2026, at T+45, or 0.855%. The issue was printed through initial whispers in the T+75 area. Proceeds will be used to back eligible projects under the company's green, social and sustainability bond framework.
Syndicate desks came into the week generally banking on $25 billion–$30 billion of new supply through Friday, Jan. 29, following on issuance totals in the $25 billion area over the last two weeks and a $50 billion total for the first full week of 2021. However, participants noted a somewhat softer primary market tone over the back half of last week, which they said left risks leaning somewhat to the downside amid this week's brisk cadence of earnings reports and after most of the leading money-center banks printed benchmark offerings last week.
Even so, the rate backdrop remains highly constructive for issuance as issuers exit their earnings blackouts. The S&P U.S. Investment Grade Corporate Bond Index came into this week sporting a yield of 1.81% and a spread of T+91, both holding near the pandemic-era lows of 1.73% and T+90, recorded earlier this month.
High-grade market stories/links
Woori Bank places 2026 sustainability bonds
AMC discloses new term loan, updates liquidity and theater openings
CEC Entertainment affirmed at Caa1 after emerging from bankruptcy
AMC Entertainment debt soars as company claims to have staved off bankruptcy
Boohoo to buy Debenhams brands for £55M
CLO news stories/links
Goldman Sachs prices $406M BlueMountain CLO XXVIII
Citi prices $526M partial refi of Octagon Investment Partners 30 CLO
Goldman Sachs prices $609M partial refinancing of Sound Point CLO XIV
BofA Securities prices $457M reset of Golub Capital Partners CLO 41(B)-R