LevFin Insights BDC Portfolio News 3/1/21Posted on March 2, 2021
Bass Pro Shops extends maturity of debt held by BBDC, OFS; Vericast seeks to extend debt held by CION
The party for leveraged loan issuers raged on last week amid a flood of repricings, opportunistic refinancings and recaps, while high-yield activity ramped back up, with both regular-way refi deals and new-money M&A sales despite the biggest surge in underlying U.S. Treasury rates since the 2016 election.
In loans, it was another huge week of launches, with $26.8 billion of volume hitting the market from 26 issuers, although with $23.5 billion of opportunistic volume including 14 repricings in the mix, new money lagged once again, at $3.3 billion on the week. And with more bond-driven repayments in the mix—Berry Global was a late entry with a $500 million issue to repay loans on Friday—and continued inflows into retail funds, issuers continue to have a technically driven wind at their backs.
Meanwhile, the secondary remained supportive despite some selling at the margin to make room for new issues. The Credit Suisse Leverage loan Index eked out a 4 bps gain as of Thursday’s close, with the average bid moving to 97.82 from 97.78 to close out the previous week.
Portfolios in brief: Holds reflect most recent reporting period available
BBDC, OFS: Bass Pro Shops (Ba3/B+) — repricing/extension
Investors received allocations of Bass Pro Shops’ repriced and extended $4.5 billion term loan (L+425, 0.75% floor), which was issued at 99.5. J.P. Morgan was left lead on the deal, which priced tight to talk with a $405 million upsize. The issuer is lowering the margin from L+500 and extending maturity to 2028, from 2024. The outdoor-oriented retailer will use proceeds of the upsize to buy back third-party equity and fund general corporate purposes. Holders of the company’s existing 1L debt include Barings BDC with roughly $2M in principal amount and OFS Capital with roughly $3M.
HMS, MAIN: Corel Corp. (B3/B-) — add-on, refinancing
KKR Capital Markets set a 99 offer price on the $75 million fungible first-lien add-on term loan for Corel Corp. The loan will be fungible with Corel’s first-lien term loan due 2026 (L+500, 0% floor). Commitments are due at 5 pm. ET Tuesday, March 2. Proceeds will be used to repay a portion the issuer’s second-lien term loan. The existing financing back KKR’s 2019 acquisition of Corel from Vector Capital. The transaction included a $485 million first-lien term loan due 2026 and a $200 million privately placed second-lien term loan, leveraging the issuer at 3.7x/5.3x, LFI reported at the time. Citi is administrative agent. Holders of the company’s existing 1L debt include HMS Income Fund with roughly $2M in principal amount and Main Street Capital Corp. with $19.5M.
Hancock Park, OFS: DuPage Medical Group (B2/B) — div recap
A Credit Suisse-led arranger group floated price talk of L+325-350 with a 0.75% floor and a 99.5 OID for DuPage Medical Group’s $650 million term loan B. Proceeds, along with cash on hand, will repay the issuer’s first- and second-lien term loans and fund a dividend. The seven-year covenant-lite term loan will include six months of 101 soft call protection. The financing also includes a $100 million revolving credit facility. Commitments are due by noon ET Friday, March 5. Hancock Park Corporate Income holds $96,348 in principal of the company’s existing 1L debt due August 2024 (L+275, 0.75% floor). Holders of the company’s 2L debt due August 2025 (L+700, 0.75% floor) include Hancock Park Corporate Income with $1.9M in principal amount and OFS Capital with $10.1M.
CION: Vericast (Caa1/CCC+) — amend/extend
Credit Suisse launched its planned amendment of Vericast’s term loan alongside its high-yield bond deal. The issuer is seeking to extend maturity of the loan due November 2023 to three months inside that of the first-lien notes. The loan’s all-in yield, including a 1% floor, would move up to 100 bps inside that of the first-lien notes, and extending term loan holders will receive their share of a $689 million paydown, leaving $775 million outstanding. In addition, the extended loan would be non-callable for one year, followed by 12 months of 101 hard call protection. The current term loan due 2023 was issued under Harland Clarke and is currently priced at L+475, with a 1% floor. The transaction is conditioned on upon 90% minimum acceptance among holders. Consents are due at 5 p.m. ET March 3. CION Investment Corp. holds $12.5M in principal amount of the company’s 1L debt due November 2023 (L+475, 1% floor). – Thomas Dunford
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