Grid IconAll Posts Blog

LevFin Insights BDC Portfolio News 3/2/2020

Posted on March 2, 2020

Fears over coronavirus stymie new issuance; Cook & Boardman, Service Logic seek add-ons to tranches held by ICMB, Audax

Jitters over the coronavirus intensified into full-fledged market panic as last week wore on. With the S&P 500 posting its worst weekly performance since 2008 and the 10-year Treasury yield tumbling to a record low, debt markets were mostly paralyzed as the week came to a close, reminding market participants of the bleak final days of 2018.

The high-yield new-issue market seemed to be shuttered for the time being, complicating deals with coordinated loan transactions. Opportunistic activity has dried up, leaving only a handful of financings pressing on as the week stumbled to a close, though by Friday the mood was described as pencils down on virtually all new issues.

Indeed new-issue statistics are telling: No bonds priced, and in loans, just four issuers launched for only $1.2 billion of volume and $800 million on a net basis. Stripping out weeks around the end-of-year and end-of-summer hiatuses, this was the slowest week for launched volume since the week ended Dec. 14, 2018.

Portfolios in brief: Holds reflect most recent reporting period available

OXSQ, SUNS, CGBD, Audax, Guggenheim, PSEC, ARCC: Capstone Logistics (B3/B-) — refi

Credit Suisse set price talk of L+450-475, with a 0% floor at 99.5 OID, on Capstone Logistics’ $395 million first-lien term loan, which will refinance existing debt. Commitments are due by noon ET Friday, March 6. Capstone last tapped the loan market in August 2018, pricing an $80.5 million add-on that grew its existing term loan due October 2021 (L+450) to roughly $450.5 million. The existing term loan is governed by a net secured leverage covenant, as reported. Proceeds of the add-on supported the purchases of LoadDelivered Logistics LLC and Logistical Labs LLC. Holders of the company’s existing TL due October 2021 include Oxford Square Capital Corp. with $12.9M in principal amount, Solar Senior Capital with $12.1M, TCG BDC with $4M, Audax Credit BDC with $1.2M and Guggenheim Credit Income Fund with $4.8M. Prospect Capital holds $99M of the company’s 2L debt due October 2022 (L+825), and Ares Capital Corp. holds $300,000 of the company’s revolver debt due April 2021.

ICMB: Cook & Boardman (B3/B) — add-on, M&A, refi

Goldman Sachs launched a $75 million add-on term loan strip for Cook & Boardman. Proceeds are for M&A and refinancing. The deal includes a $50 million fungible add-on to Cook & Boardman’s first-lien term loan due October 2025 (L+575, 1% floor) and a $25 million delayed-draw term loan that won’t be immediately fungible. The new money is offered at 99 and the issuer will reset 101 soft call protection for six months. Commitments are due Friday, Feb. 28. The original $212 million first-lien term loan, which is governed by a net total leverage test, backed Littlejohn & Co.’s 2018 acquisition of the company from Ridgemont Equity Partners. Cook & Boardman is national distributor of doors and related products used primarily in commercial applications. Investcorp holds $9.9M in principal amount of the existing 1L debt.

Audax: Service Logic (TBD/TBD) — add-on, M&A

Antares Capital set a 99 OID on the $140 million in add-on loans for Service Logic. Pricing on the issuer’s term loan due December 2024 is L+425 with a 1% floor and 25 bps steps at 3.75x net first-lien and 3.25x net first-lien leverage. The incremental facilities will comprise a $40 million funded term loan and a $100 million delayed-draw term loan that is available for 18 months and carries a 1% ticking fee beginning on day 61, sources said. Also note that the OID on the delayed-draw loan will be paid on draw-down, sources said. Proceeds from the transaction will be used to finance acquisitions. Commitments are due Wednesday, March 11. Last month, Service Logic acquired Huckestein Mechanical Services, a Pittsburgh-based mechanical services provider in the HVAC space. Audax Credit BDC holds $1.6M in principal amount of the company’s 1L debt due December 2024 (L+425). – Thomas Dunford

Download LFI BDC Portfolio News 3-2-20 for BDC investment details provided by Advantage Data; click through links to view stories by LFI.

thomas.dunford@levfininsights.com

212.205.8552


This information is for the sole use of Thomas Dunford. Copyright 2016-2020 LevFin Insights. The copying, replication or redistribution of LevFin Insights content in any form is expressly prohibited without the prior written consent of LevFin Insights.


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

Share

facebook share icon twitter share icon linkedin share icon
Ready to get Started? Free Trial