Think

LevFin Insights BDC Portfolio News 12-3-18

Posted by Thomas Dunford on Dec 4, 2018 7:30:00 AM
Find me on:

LBOs to take out Elo Touch, Latham Pool debt held by BDVC, FSIC, GARS

Arrangers pressed forward with some of the final new-issue loans of 2018 last week, but it’s an open question as to how much enthusiasm remains among buysiders that have been buffeted by volatility in recent weeks. The recent downdraft has repriced the primary market, and issuers are seeking to address the issue with yield—and not just on dicier transactions.Meanwhile, high-yield’s heartbeat barely registered with a single $350 million print and a murky outlook on further deal flow as the loan market continued to dominate the waning supply in the final weeks of 2018.Download: LFI BDC Portfolio News 12-3-18It was another bruising week in the loan secondary, although after a couple of rough sessions the market was mixed to close out the week. Loan mutual funds that report weekly to Lipper FMI recorded an approximately $1.3 billion outflow for the week ended Nov. 28, compounding the prior week’s $1.7 billion withdrawal. Wednesday’s rally in equities on Federal Reserve Chairman Powell’s suggestion that rate hikes could slow was lost on the loan market, which was fixed on a $464.5 million BWIC that was widely rumored to be a reduction of a separately managed account.The average bid price of the Credit Suisse Leveraged Loan Index declined 37 bps for the five days ended Nov. 29, to 96.89% of par. The average bid price was down 123 bps from 98.12 at the start of November, for a negative month-to-date return of 0.77%, putting it on pace for its worst monthly performance in nearly two years.While CLOs are a stabilizing force in the loan secondary since the recent weakness presents an opportunity for them to buy paper at a discount and build cushion against their overcollateralization tests, the recent volatility has crept into both the primary and secondary CLO markets, which could have ramifications for future issuance. Wells Fargo analysts note in a report Friday that CLOs are now at the widest levels seen in the past year throughout the stack, and demand for CLO equity has softened.Portfolios in brief: Holds reflect most recent reporting period availableGuggenheim: Container Store Group (B3/B-) — add-on, M&A
UBS set a 98 offer price on the $55 million add-on first-lien term loan for BBB Industries, sources said. Proceeds would be used to fund the acquisition of Remy Power Products’ North American rotating electrical business. The loan would be fungible with the first-lien term loan due August 2025, which is priced at L+450. Commitments are due Monday, Dec. 10, sources added. Guggenheim Credit Income Fund holds $2M of the existing 1L debt.BBDC: Berlin Packaging (B3/B-) — add-on, recap
Jefferies today moved up the commitment deadline to 5 p.m. ET tomorrow for the $60 million add-on to Berlin Packaging’s first-lien term loan, according to sources. The deadline was slated for noon ET Wednesday, Dec. 5, but the bond market is closed in remembrance of President George H.W. Bush. As reported, the add-on loan is talked at 98.55 and would be fungible with the issuer’s existing covenant-lite first-lien term loan due November 2025 (L+300). The 101 soft call protection rolled off earlier this month. The loan is being syndicated in connection with a recapitalization of the company by current sponsor Oak Hill Capital Partners and Canada Pension Plan Investment Board. CPPIB will make a $500 million investment, and company management will also make a “significant” investment, according to the company. Oak Hill will retain a majority stake, sources said, though is moving the investment to Oak Hill Fund IV from Oak Hill Fund III. Barings BDC holds $8.5M of the existing 1L debt.BDVC, FSIC, GARS: Elo Touch Solutions (B2/B+) — LBO
A Goldman Sachs-led arranger group set price talk of L+650, with a 0% floor and an OID of 97–98 on the $360 million first-lien term loan backing Crestview Partners’ acquisition of Elo Touch Solutions, according to sources. The seven-year loan would include 12 months of 101 soft call protection. Commitments are due by noon ET Friday, Dec. 7. Goldman Sachs, Citizens and MidCap Financial are arranging the loan. The issuer is also putting in place a $35 million revolver. Holders of the existing term loan (L+600, 1% floor) due October 2023 include Business Development Corp. of America with $2.6M, FS Investment Corp. with $2.9M and Garrison Capital with $4.3M.FSIC: Latham Pool Products (B2/B) — LBO, refi
Nomura set price talk of L+600 with a 0% floor and 98 OID on the $215 million term loan B supporting Pamplona Capital Management’s acquisition of a majority interest in Latham Pool Products, according to sources. The seven-year covenant-lite term loan will carry 101 soft call protection for 12 months, sources added. The issuer is also putting in place a $30 million five-year revolver with a springing covenant. Commitments are due Wednesday, Dec. 12. In addition to the Pamplona acquisition, proceeds would help refinance existing debt and pay related fees and expenses. Pamplona is acquiring the majority stake from Wynnchurch Capital, which is staying on as a minority interest holder. Holders of the existing 1L debt (L+775, 1% floor) due June 2021 include FS Investment Corp. with $56.2M, FS Investment Corp. II with $28M and FS Investment Corp. III with $36.1M.American Capital, CCT: Vantage Specialty Chemicals (B3/B-) — add-on, M&A
Investors received allocations of Vantage Specialty Chemicals’ $88 million add-on first-lien term loan (L+350, 1% floor), which was issued at 98, the wide end of a revised 98-98.5 range, sources said. Morgan Stanley was left lead on the deal, which priced wide of talk with a $15 million upsize to eliminate a planned second-lien add-on. Proceeds will be used to fund the company’s acquisition of LEUNA-Tenside from VR Equitypartner and BIP Investment Partners. HIG Capital controlled Vantage is a maker of natural ingredient products, including those derived from animal fat and vegetable oil. American Capital Senior Floating holds $668,000 in principal amount of the 1L debt due October 2024 and $125,000 of the 2L debt (L+825, 1% floor) due October 2025. Corporate Capital Trust II - T holds $755,000 of the 2L debt. – Thomas DunfordDownload LFI BDC Portfolio News 12-3-18 for BDC investment details provided by Advantage Data; click through links to view stories by LFI.thomas.dunford@levfininsights.com
212.205.8552

 

Topics: LevFin Insights, News, Fixed Income, business development company, market analytics, Analytics, BDC, Middle Market


Are you using AdvantageData?

AdvantageData is your fixed income solution for pricing, analytics, reports, and insight on approximately:

  • 500,000+ U.S. and international corporate bonds
  • Over 6,200+ CDS reference entities
  • Over 22,000+ syndicated loans
  • Over 100 equity markets worldwide
  • One platform 16 products and services from debt to CDS to loans to mid-market
  • Used by top buy and sell-side firms worldwide

 

Subscribe to Email Updates

Recent Posts