Leveraged loan volume in the U.S. totaled $8.3 billion last week, up sharply from the $3.5 billion the previous week, though volume overall remains unimpressive.
The largest deal to launch was a $1.68 billion credit backing CACI International’s acquisition of Six3 Systems. Both companies provided information solutions and services in support of national security missions and government transformation for intelligence, defense, and federal civilian customers.
Of interest last week, private equity concerns Carlyle and Stone Point launched a $135 million term for financial advisory concern Duff & Phelps backing, among other things, a dividend to the sponsors. As well, the loan was covenant-lite, meaning it has fewer restrictions than seen on traditional loans. (You can read more about how covenant-lite loans work here.) Despite the looser structure and dividend purpose, the credit saw appetite enough in the institutional investor market that the fee on offer to join the deal was trimmed during syndication, according to LCD’s Chris Donnelly and Kerry Kantin.
Of the 16 deals officially launching during the week (through yesterday), five were covenant-lite while eight arrived courtesy private equity sponsors (including Duff & Phelps).
With last week’s activity, year-to-date leveraged loan volume totals $508 billion, easily outpacing the full-year 2012 total of $465 billion. The full-year record is $535 billion in 2007. These volume numbers entail “new-money” deals, as opposed to credits that simply reset existing tranches of add-on loans, amendments and restatements.