LevFin Insights BDC Portfolio News 2-25-19

Posted by Thomas Dunford on Feb 26, 2019 8:45:00 AM
Thomas Dunford
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Amynta add-on deal would boost margin on debt held by Ares Capital Corp.

Last week’s holiday-abbreviated calendar offered little action in the primary markets—loan arrangers launched a mere six deals for a paltry $3.2 billion of volume, while high-yield offered a string of well-received, refinancing-related drive-by deals. However, the week offered real drama as market participants digested the fallout from the bombshell news that Windstream Services lost a default ruling to Aurelius Capital Management. That ruling cast a long shadow over the nearly $10.5 billion of debt issued by Windstream and spinoff Uniti Group.

Download: LFI BDC Portfolio News 2-25-19

Even as new-issue loan activity continued to ebb during the week, deal flow remained heavily weighted toward M&A and LBO deals.

Accounts were quick to pounce on well-known, well-regarded credits in the primary market, but the secondary was also better-bid due to the thinning new-issue calendar. The average bid price of the Credit Suisse Leveraged Loan Index ended the day Thursday at 96.47% of par, up 32 bps from 96.15% a week prior.

With a mere handful deals pricing last week, official flex activity was limited to a pair of deals tightening and just one moving wider. However, there’s a series of slower-moving transactions, either cyclical or with a difficult credit story, facing deadlines this week that should result in additional revisions favoring investors.

Nevertheless, investors’ behavior demonstrated a marked bias toward higher quality and familiar names such as Sprint Communications and Univar

"Net-Net" Calendar

Portfolios in brief: Holds reflect most recent reporting period available

ARCC: Amynta Group (B3/B-) — add-on, M&A

A Bank of America Merrill Lynch-led arranger group outlined talk of L+425 with a 97-97.5 offer price on the $125 million fungible add-on term loan forAmynta Group, proceeds of which would be used to fund acquisitions under letter of intent. The existing covenant-lite first-lien term loan due February 2025 would be marked up to L+425 from L+400, and the issuer would refresh the loan’s 101 soft call protection for six months, according to sources. Commitments are due at noon ET Wednesday, Feb. 27. Amynta was last in market in October with a $50 million add-on and a repricing that lowered the margin on the loan from L+450. The issuer reset the 101 soft call protection for six months in connection with the October transaction. Ares Capital Corp. holds $27.2M in principal amount of the existing 1L debt. – Thomas Dunford

Download LFI BDC Portfolio News 2-25-19 for BDC investment details provided by Advantage Data; click through links to view stories by LFI.

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