LevFin Insights BDC Portfolio News 6/14/21Posted on June 15, 2021
Four more BDC-held credits pursue refinancings as opportunistic activity dominates
Loan market conditions grew increasingly robust over the past week with issuers scoring pricing levels and a flood of reverse-flex activity, including seven transactions tightening on Thursday alone. Market conditions were supported by another slowdown in the volume, if not the pace, of loan launches. Meanwhile, high-yield activity rebounded, nearly doubling the previous week’s anemic deal flow.
Despite issuer-friendly market conditions, launched loan volume eased to $9 billion from $18.9 billion the prior week, though with 21 issuers tapping the market it remained busy. As expected, opportunistic activity again came to the fore, and that’s reflected in the mere $3.0 billion of net launched volume.
Portfolios in brief: Holds reflect most recent reporting period available
BCRED, BDVC: AccentCare (B3/B-) — Refinancing
J.P. Morgan tightened talk on AccentCare’s $873.4 million first-lien term loan B due June 2026 to L+400 from a range of L+425-450 with no change to the 0% floor or par offer price. Recommitments are due at 5 p.m. ET with allocations expected tomorrow. The transaction will combine and reprice the issuer’s existing $349.7 million term loan (L+450, 0% floor) and the $523.7 million incremental first-lien term loan (L+500, 0.5% floor), both maturing in 026. The deal also includes a 25 bps step-down upon achieving B2/B stable/stable corporate ratings. The repriced deal includes six months of 101 soft call protection. Blackstone Private Credit Fund holds $307,000 in principal amount of the existing incremental debt. Business Development Corp. of America holds $30.2M of the company’s 2L debt due June 2027 (L+875).
Steele Creek: DRW Holdings (Ba3/BB-) — Add-on/GCP
Jefferies set a 99.25-99.5 offer price on the $75 million add-on term loan for DRW Holdings that will be used to increase trading capital. The loan will be fungible with the recently arranged $500 million term loan B due March 2028 (L+375, 0% floor). The loan carries 101 soft call protection through Sept. 1. Commitments are due at noon ET on Thursday, June 17. Steele Creek Capital Corp. holds $1M in principal amount of the existing 1L debt.
Steele Creek: Mannington Mills (B1/BB-) — Refinancing/repricing
RBC Capital Markets set talk of L+350 with a 0% floor and a par offer price on the proposed repricing of Mannington Mills’ roughly $261 million term loan B. The commitment deadline is 5 p.m. ET Tuesday, June 15. The loan due 2026 is currently priced at L+400 with a 0% floor. RBC is agent on the facility. Proceeds of the deal, which was arranged by RBC and SunTrust Robinson Humphrey, refinanced debt. Steele Creek Capital Corp. holds $440M in principal of the existing 1L debt.
Palmer Square: Samsonite International (Ba2/B+) — Refinancing/repricing
HSBC set price talk of L+300-325, with a 0.75% floor and a 99.5 OID on the proposed repricing of Samsonite International’s incremental term loan B-2 due 2025. The issuer is repricing $495.5 million of the currently $595.5 million tranche while repaying $100 million with cash from the balance sheet. Current pricing is L+450, with a 1% floor. The transaction would trigger a 101 payout on the existing loan; the TLB-2 was placed in April 2020, with a NC1, 101 hard call structure. Proceeds were for general corporate purposes. Lenders are offered six months of 101 soft call protection on the repriced loan. Commitments are due by noon ET tomorrow. As with Samsonite’s existing $665 million TLB due 2025 (L+225, 0% floor), the loan is subject to a minimum liquidity maintenance covenant. BofA Securities is agent on the loans. Palmer Square Capital BDC holds $1.8M in principal amount of the existing incremental debt.
OCSL, OSCI, CSWC: Signify Health (B1/B) — Refinancing
A Barclays-led arranger group this morning accelerated the commitment deadline on the $350 million, seven-year term loan for Signify Health to noon ET Wednesday, June 16. Commitments were originally due at 5 p.m. ET Thursday, June 17. There’s no update to price talk of L+325-350 with a 0.5% floor and a 99.5 offer price. Proceeds will refinance the issuer’s original and incremental term loans while lowering pricing. The transaction would lever the issuer at 2.3x, all senior. The arranger group also includes J.P. Morgan, Goldman Sachs, BofA Securities and UBS. Investors are offered six months of 101 soft all protection, and the issuer is seeking a 12-month sunset on 75 bps of MFN protection. The issuer in December placed via UBS a $140 million incremental term loan due 2024 (L+525, 1% floor). New Mountain Capital in 2017 combined CenseoHealth and Advanced Health to form Signify. That original loan due 2024 was repriced at L+450 with a 1% floor. The issuer went public earlier this year. Signify Health provides health risk assessment to Medicare Advantage health insurance plans. Holders of the original 1L debt include Oaktree Specialty Lending Corp. with $10.7M in principal amount, Oaktree Strategic Income II with $6.9M and I-45 SLF LLC, a joint venture between Capital Southwest Corp. and Main Street Capital Corp., with $5M. – Thomas Dunford
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