16 Mar, 2021
LCD News Today: March 16, 2021
By LCD News
Primary leveraged loan market
Sinclair Television Group Inc. and Autokiniton added another $1.9 billion to the refinancing heap today while timing firmed up on leveraged buyout deals for Atlantic Power Corp. and Aegion Corp.
Sinclair Television Group is in market with a $1.119 billion term loan B via a J.P. Morgan-led arranger group. Price talk for the new seven-year TLB is L+275-300, with a 0% Libor and an issue price of 99.5. Proceeds from the deal will be used to refinance Sinclair's existing $1.119 billion covenant-lite term loan B-1 due January 2024 that is priced at L+225, with a 0% floor. Note that STG also has outstanding a term loan B-2 due September 2026 (L+250, 0% floor), which totaled $1.284 billion as of Dec. 31, 2020.
KPS Capital Partners portfolio company Autokiniton, a supplier of metal stampings and welded assemblies to the automotive industry, is refinancing its existing $439 million covenant-lite TLB-1 due May 2025, $250 million incremental TLB-2 due May 2025, and $100 million term loan A. A new $810 million covenant-lite TLB due 2028 is talked at L+475, with a 0.50% floor and an issue price of 99-99.5. Citi is left lead on the deal.
Triton Water Holdings Inc. upsized its term loan B by $750 million, to $2.55 billion, replacing a planned secured notes issuance. Price talk for the seven-year covenant-lite TLB was also tightened to L+350, with a 0.50% floor and an issue price of 99.5. Prior guidance was L+375, at 99-99.5. There remain two step-downs, one leverage-based and one triggered upon an IPO. Morgan Stanley leads the deal that backs the $4.3 billion buyout of the North American bottled water business of Nestlé SA by One Rock Capital Partners and Metropoulos & Co. Debt financing also includes $670 million of senior unsecured notes.
A Credit Suisse-led arranger group was circulating revised terms on the $1 billion covenant-lite term loan B for Win Waste Innovations ahead of today's commitment deadline. The seven-year TLB tightened to L+275, from L+325 at launch, with a 0.5% floor and an issue price that is unchanged at 99.5. Proceeds from the deal will be used for the recapitalization of the legacy Wheelabrator Technologies Holdings Inc. business and to refinance debt at Tunnel Hill Partners LP, two portfolio companies of Macquarie Infrastructure Partners that are being merged.
Primary leveraged loan stories/links
Sinclair Television Group lines up $1.119B term loan for refinancing
Autokiniton launches $810M term loan for refinancing; commitments due March 25
Win Waste Innovations tightens pricing on $1B term loan; commitments due today
Watlow sets final terms on $515M term loan for buyout; recommits due March 17
Aegion sets March 17 lender call to launch $650M term loan for buyout
Atlantic Power sets March 18 call to launch $360M term loan backing buyout
DuBois Chemicals plans to issue $90M add-on term loan to repay debt
RSA Security lines up arrangers for financing supporting Clearlake investment
Denali Water Solutions accelerates deadline to today for $395M term loan
PODS accelerates commitment deadline for $1.165B term loan to March 18
Secondary leveraged loan market
In ratings news today, S&P Global Ratings has upgraded Option Care Health Inc.'s issuer rating to B, from B-, and maintained its positive outlook on the issuer as the company has reported stronger-than-expected earnings results and remains committed to further deleveraging. The rating on the issuer's first-lien term loan due August 2026 (L+450, 0% Libor floor) was also upgraded to B, from B-. The term loan totaled $915.8 million as of Dec. 31, 2020, and was quoted at 99.875/100.375 today. The company reported adjusted EBITDA and revenue of $67.7 million and $804.7 million, versus consensus estimates compiled by S&P Capital IQ of $63.4 million and $793 million, respectively.
Meanwhile, Moody's upgraded Hayward Holdings Inc.'s issuer rating to B2, from B3, following the company's recent pricing of its IPO and its intention to use $350 million of net proceeds to repay debt. The issuer intends to repay in full its $205 million second-lien term loan due August 2025 (L+825, 0% Libor floor) and the remainder to repay a portion of its first-lien term loans on a pro rata basis. The issuer currently has a first-lien term loan due August 2024 (L+350, 0% Libor floor) that totals $958 million and a $150 million nonfungible incremental first-lien term loan due August 2026 (L+375, 0.75% Libor floor). Both first-lien term loans are quoted in a 99.875 bid context.
Elsewhere, investors received allocations yesterday of EyeSouth Partners LLC's $375 million funded first-lien term loan and $65 million delayed-draw first-lien term loan that priced at L+450, with a 0.75% Libor floor and an original issue discount of 99.75 via sole lead arranger Jefferies. The seven-year term loan has a 25 bps leverage-based margin step-down at 5x gross first-lien leverage. The term loan freed to a 99.75/100.25 market, where it remained today, and will be used to refinance debt and finance near-term acquisitions.
Pitney Bowes Inc.'s recently allocated $450 million amend-and-extend transaction is quoted at a 99.75/100.25 level after the seven-year term loan B (L+400, 0% Libor floor) priced at an OID of 99 via lead arranger J.P. Morgan. The transaction extended the maturity of the facility from January 2025 and lowers the spread from L+550, with a 0% floor. Proceeds from a concurrent bond offering repaid a portion of the term loan, which totaled $818 million previously.
Secondary leveraged loan stories/links
EyeSouth Partners completes $375M term loan, $65M DDTL; terms
Pitney Bowes wraps $450M term loan extension, repricing; terms
Primary high-yield market
An anticipated $6 billion-plus crossing the finish line today boosts year-to-date issuance to $124.1 billion and the month-to-date completed sum to $34.9 billion, just $8 billion shy of the March record set in 2017 of $42.9 billion.
T-Mobile US Inc. was on the docket with a $3 billion, three-part senior notes offering to back its recent $9.3 billion purchase of spectrum licenses pursuant to a C-bank spectrum auction from the Federal Communications Commission, and refinance existing 6.5% senior notes due 2026. The five-year notes were launched at 2.625%, the eight-year at 3.375%, and the 10-year at 3.5%. Issue ratings are BB/Ba3/BB+. The company in February also completed a $3 billion debt raise printing 2.25% senior notes due February 2026, 2.625% senior notes due February 2029 and 2.875% senior notes due 2031.
Another broad market name, Yum! Brands Inc. also proposed a new issue. The company pitched $1.05 billion of 10.75-year senior unsecured bonds guided at 4.50%-4.75%, to fund the repayment of existing 5.25% senior notes due 2026. The new issue garnered a ratings lift for Yum!'s unsecured debt at S&P Global Ratings, with an upgrade to BB-, from B+. Moody's was expected to assign a B1 rating to the new debt.
Ferrellgas Partners LP was also on tap with a senior notes offering, as was International Game Technology PLC, which proposed secured debt.
Meanwhile, anticipated weekly volume has slimmed by $750 million following the removal of Triton Water Holdings Inc.'s planned seven-year secured notes from a two-part bond offering. The issuer remains on the calendar with $670 million of eight-year senior notes, guided at 6.25%-6.50%, and a concurrent term loan B has been upsized by $750 million, to $2.55 billion. The raise supports the $4.3 billion buyout of the North American bottled water business of Nestlé SA by One Rock Capital Partners and Metropoulos & Co. Pricing for the bonds is scheduled tomorrow, March 17.
Primary high-yield stories/links
Triton Water floats price talk for $670M of unsecured notes
T-Mobile US firms pricing for $3B, triple-tranche high-yield bond offering
Ferrellgas guides $1.475B, 2-part bond offering for restructuring
Yum! Brands floats price guidance for $1.05B intraday bond offering
International Game Technology drives by with $500M bond offering
Secondary high-yield market
It was another subdued session in the high-yield secondary market with activity capped by rising rates and supply levels ahead of tomorrow's attention-grabbing Federal Open Market Committee meeting. Some $6 billion-plus of paper was due to clear by the end of the day, including $3 billion of spectrum financing from T-Mobile US Inc., and traders predicted another $5 billion of possible pricings over the rest of the week. That has brought out duration sellers, keeping the pressure on the long end of the curve even as rates seem to have stabilized.
Duration sellers pushed the Ford Motor Co.’s 4.75% another 1.375 points lower to close on the lows at 97.625, while other Ford bonds bobbled after the company affirmed its 2021 financial guidance but said results for the year could be negatively impacted if the current semiconductor shortage extends through the first half of the year. The carmaker also announced the private sale of $2 billion in convertible senior notes due 2026. The 9% 2025 bonds were the most active of the borrower’s vast stack of senior unsecured bonds, ending the session flat to the open at 120.75, after having hit 121.375 on the highs.
Energy bonds underperformed as oil prices fell for the third day in a row, with some European countries suspending the use of the AstraZeneca vaccine amid the onset of a third wave of coronavirus infections. Bonds backing Continental Resources Inc. led to the downside on some of the biggest trading volumes of the day, with its 4.9% senior notes due 2044 2 points off yesterday’s post-slump high at 102.5, and the November issue of 5.75% senior notes due January 2031 shedding 1.375 points, to 112.75, versus a fresh high of 115.125 on March 11.
Teva Pharmaceutical Industries Ltd. bonds reversed losses yesterday on news that the company and other opioid manufacturers will go to California in April to face local-government charges of deceptive marketing. Of the issuer’s senior unsecured stack, the most active 3.15% notes due 2026 and the most pressing 3.65% November 2021s advanced half a point apiece, to 94.625 and 101, respectively. Bonds backing fellow defendant Endo International PLC bonds continued lower, with the 9.5% senior notes due 2027 netting a half a point intraday loss, to 108.75, extending a steady decline from January highs around 115.25.
Monday's brace of new high-yield deals failed to shed their par handles in today’s flat secondary after breaking to a similar backdrop. Sensata Technologies BV’s upsized $750 million offering of 4% eight-year senior notes ended the day where they broke, at 100.5, while TriMas Corp.’s $350 million of eight-year senior notes closed in the middle of their initial range at 100.375.
High-yield secondary stories/links
New high-yield offerings retain par handles in sluggish secondary
High-grade market
High-grade issuance continued in medium gear today as the Federal Open Market Committee kicked off its two-day event, and aftermarket participants at the start of the week noted sluggish market conditions ahead of the meet, even as the VIX index today tested 12-month, pandemic-era lows south of 20 during the session. Issuance totaled $7.65 billion from six issuers, boosting the week's total to $13.35 billion, ahead of an expected lull tomorrow in deference to potential rate reaction to the Fed policy statement.
Leading today's slate was a $4 billion launch of senior notes for Charles Schwab Corp., as the company targeted the repayment of notes due in May, and a further boost to its liquidity profile post its acquisition last October of TD Ameritrade. The company yesterday placed $2.25 billion of preferred stock to bolster regulatory capital, and the offerings this week augment its capital raises in December, across $2 billion of senior notes, and $2.5 billion or preferred stock.
Other refinancing-driven prints today included $600 million of 0.80% 3-year notes for WEC Energy Group Inc., which earmarked some of the proceeds to repay a 364-day term loan it netted at the end of March last year, in the early weeks of the pandemic. The deal marked WEC's third refinancing-driven bond placement since last September, all in aid of lengthening the company's debt-maturity curve. Welltower Inc. placed $750 million of 2.80% 10-year notes, eyeing the repayment of two issues of notes due 2023.
Illumina Inc. today padded the growing total for M&A-driven deals so far this year, placing $1 billion across 2- and 10-year issues, backing its pending $8 billion acquisition of GRAIL, a provider of cancer-detection techniques. Rounding out the primary slate were deals for Deutsche Bank AG ($800 million) and Standard Chartered PLC ($500 million), both backing respective sustainability goals for those banks.
High-grade market stories/links
Charles Schwab launches $4B of notes in 3 parts amid liquidity push
Illumina launches 2-part offering to fund acquisition
Welltower targets 2023 notes with new 2031 offering
WEC Energy places 3-year notes to repay pandemic-era term loan
Distressed news stories/links
Mallinckrodt nets OK for $114M principal payment to first-lien term lenders
Gulfport Energy in 'constructive' talks with cred panel on plan modifications
Exela Technologies nets $27M from stock, warrants in private placement
CGG cut by S&P Global Ratings to CCC+ on high debt, lower profits
Dümmen Orange nets unanimous lender consent for restructuring
Takko's new financing split as secured loan and private placement
CLO market stories/links
Nomura prices $512M Venture 42 CLO for MJX Asset Management
J.P. Morgan prices $520M refinancing of Sound Point CLO XVII
J.P. Morgan prices $385M refinancing of BlueMountain Fuji US CLO I
Morgan Stanley prices $612.5M reset of KKR CLO 17
Global CLO Roundup: Elevated supply pushes spreads wider further down the stack