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Genstar-backed companies drive M&A activity in positions held by AINV, PFLT, SUNS, Audax, TCPC and GSBD

The new-issue loan market turned a corner last week with a procession of closely watched, larger transactions wrapping—due in part to a resurgent high-yield market—leaving investors with little else to chew on. The sudden prospect of a slowing calendar flipped a switch, and accounts flooded into transactions they had previously been viewing with a cautious eye. The frenzy generated seven reverse flexes, including some that were being discussed wide of official guidance just a few days earlier. Indeed no loan deals widened as the market heated up.

Getty Images refinancing first-lien debt held by Barings BDC

Download: LFI BDC Portfolio News 2-4-19

While the loan market has hit a plateau after rallying in the opening days of 2019, high-yield continued to pick up steam, generating a bifurcation between loans and bonds in both the primary and secondary markets. As such, issuers have flocked to the bond market—including the secured-bond market—to optimize executions as last week’s big-ticket transactions for Dun & Bradstreet and TransDigm exemplify.

M&A continues to drive activity; LBO to take out P.F. Chang’s credits held by CĪON, FSK

Arrangers continued to peel more M&A loan business off the forward calendar last week, although early 2019 successes, driven by the opening-week rally, appear to be giving way to a slightly more cautious tone. A resurgent high-yield new-issue market is benefiting as a pair of borrowers are carving out secured notes to take pressure off multibillion-dollar loan executions.

M&A drives new debt for names in several portfolios, including recently combined FS KKR Capital

The loan market remained fixated on the primary calendar as $9.4 billion of new loans, all of it M&A- and LBO-related, entered syndication last week. Following the secondary market’s early January rebound, the primary also was off to a solid start last week with a series of oversubscribed transactions, accelerated timing and the return of reverse-flex activity as some new issues started to cement pricing levels well south of the December’s rate spike.

Aimbridge LBO to take out unitranche debt held by Bain Capital Specialty Finance, Golub

Download: LFI BDC Portfolio News 1-14-19