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LevFin Insights BDC Portfolio News 12-9-19

Posted on December 11, 2019

LFI BDC Portfolio News 12-9-19: Leonard Green’s acquisition of WIRB-Copernicus to take out debt held by GBDC, SUNS, Guggenheim

Mindful of the narrow window to complete business before the unofficial end-of-the-year hiatus, loan arrangers quickly reloaded the calendar with a fresh wave of opportunistic business, including a new crop of double-B repricings, though M&A/LBO volume was thin with most of the underwritten deals on the calendar slated for 2020 business. In high-yield, issuers continued to pile on to take advantage of hot market conditions, which were underscored by debut issuer Twitter’s sub-4% print for unsecured notes.

The broader secondary loan market adopted a firm tone as December kicked off, as investors had little new money to chew on heading into the end of the year: of the $21.8 billion of loans currently in market, only $7.3 billion represents new money to the market. The average bid price of the Credit Suisse Leveraged Loan Index advanced to 95.69% of par as of Thursday’s close, up 23 bps from December’s initial reading of 95.46.

The headline number on loan launches last week—21 issues totaling $17.6 billion—was highly misleading, as the aforementioned repricing activity accounted for $12 billion of that tally; indeed, net launched volume was a mere $2.9 billion.

 

Portfolios in brief: Holds reflect most recent reporting period available

Audax, CGBD, OFS: Tank Holding (B3/B) — add-on, repayment

Investors received allocations of Tank Holding’s $30 million add-on term loan (L+400), which was issued at 99.875. Morgan Stanley was left lead on the loan, which priced tight to talk. Proceeds repay revolver borrowings. Olympus Partners-controlled Tank Holding manufactures proprietary rotational molded polyethylene and steel storage tanks and containers used in above-ground, below-ground and portable applications. Holders of the company’s existing 1L debt include Audax Credit BDC with $1M in principal amount; TCG BDC and TCG BDC II, each with $7,000; and OFS Capital with $2M. TCG BDC and TCG BDC II both list $37.4M of the company’s 2L debt due March 2027 (L+825) and an equity stake valued at $966,000 in their portfolios.

GBDC, SUNS, Guggenheim: WIRB-Copernicus Group (B3/B) — LBO

A Barclays-led arranger group set talk of L+425-450 with a 1% floor and a 99 offer price on the $920 million first-lien term loan backing Leonard Green & Partners’ acquisition of a majority stake in clinical research concern WIRB-Copernicus Group. Investors also are offered six months of 101 soft call protection. Commitments are due Friday, Dec. 13. Financing for the deal also includes a $125 million revolver and a $345 million second-lien term loan that has been placed privately. In addition to administrative agent Barclays, the arrangers include Morgan Stanley, Goldman Sachs, BMO Capital Markets, Golub Capital and HSBC. The issuer is a longtime portfolio company of Arsenal Capital Partners. The issuer recapitalized in late 2016, bringing in MSD Capital and other institutional investors. Current debt is a club transaction including a first-lien term loan due August 2022 (L+425) and second-lien term loan due August 2023 (L+825). Golub Capital is agent on the existing debt. Holders of the existing 1L debt include Golub Capital BDC with $24.6M in principal amount and Solar Senior Capital with $12.4M. Guggenheim Credit Income Fund holds $12M in principal amount of the existing 2L debt.

Download LFI BDC Portfolio News 12-9-19 for BDC investment details provided by Advantage Data; click through links to view stories by LFI.

thomas.dunford@levfininsights.com 212.205.8552

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