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LevFin Insights BDC Portfolio News 4/19/21

Posted on April 21, 2021

Aspect Software, Mavis Tire roll out LBO deals; existing debtholders include FSK, ARCC, ORCC, Audax, Guggenheim

Maximizing relative value was a theme in the leveraged finance market last week as a trio of large deals—CoreLogic, Kissner Group and United Airlines—concurrently placed first-lien loan and bonds. The heavy supply commanded loan investors’ attention and provided the buyside with leverage to extract changes on several deals, though certain deals drew a crowd, allowing for significant reverse flex despite the more balanced technical landscape. High-yield also feasted on M&A, though drive-by refinancing activity helped power the market to its second-busiest week of the year by volume.

Back in loans, after a few weeks of moderate activity, new-issue launches exploded anew with $24.4 billion from 23 issuers and $15.7 billion on a net basis. M&A was the biggest contributor to launch volume last week as arrangers rolled out $12.3 billion of merger loans, much of that activity coming off LFI’s forward calendar.

Portfolios in brief: Holds reflect most recent reporting period available

FSK: Aspect Software (TBD/B-) — LBO

A Jefferies-led arranger group launched a first- and second-lien loan financing for Aspect Software, which would support the acquisition of the issuer and Noble Systems Corp. by Abry Partners. The financing comprises a $610 million seven-year first-lien term loan, a $250 million eight-year second-lien term loan and a $75 million five-year revolving credit facility, per sources. The first-lien term loan would include six months of 101 soft call protection, while the second-lien would carry 102, 101 hard call premiums in years one and two, respectively. Price talk is not yet available. A lender call is set for 12:30 p.m. ET Tuesday, April 20. FS KKR Capital Corp. holds $700,000 in principal amount of the company’s existing 1L debt due July 2024 (L+500, 1% floor) and equity stake valued at a combined $500,000. FS KKR Capital Corp. II holds a $3.3M of the July 2024, $9M of 1L debt due January 2024 (L+500, 1% floor) and equity stakes valued at a combined $3,4M.

ARCC, ORCC, Audax, Guggenheim: Mavis Tire Express Services (TBD/TBD) — LBO

A Jefferies-led arranger group alerted investors that the lender call for Mavis Tire Express Services would be rescheduled for this week. Mavis is in the market with a $1.915 billion term loan B backing its acquisition. Alongside the TLB, the issuer is also putting in place a $200 million revolver and $820 million of senior notes, as reported. Price talk on the TLB is not yet available, but the seven-year loan would include six months of 101 soft call protection. Holders of the company’s 1L debt due March 2025 (L+325) include Audax Credit BDC with $3.8M in principal amount, Guggenheim Credit Income Fund with $3.6M, Owl Rock Capital Corp. with $864,000 and Owl Rock Capital Corp. II with $128,000. Holders of the company’s 2L debt include Ares Capital Corp. with a combined $178.6M, Owl Rock Capital Corp. with $179.9M and Owl Rock Capital Corp. II with $26.7M. Ares Capital Corp. also holds an equity stake valued at $19M. – Thomas Dunford

Download LFI BDC Portfolio News 4-19-21 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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