Leveraged Loan Issuers Return to the Primary Market Last Week
Junk Bond Issuers Step Back during Monetary Policy Week
Primary market activity in leveraged loans
According to data from S&P Capital IQ/LCD, the US leveraged loans market saw an allocation of $3.8 billion worth of senior loans in the week ending September 18. The previous week had not witnessed any issuance of leveraged loans. Three transactions were priced in the week. Senior loans are tracked by the PowerShares Senior Loan Portfolio (BKLN) and the Highland/iBoxx Senior Loan ETF (SNLN).
Unlike leveraged loans, the high yield bond (JNK) (HYG) primary market saw deals worth just $0.975 billion last week. Berry Plastics and Acadia Healthcare Company (ACHC) were among the issuers of high yield bonds last week.
Noteworthy transactions
Berry Plastics Group (BERY) manufactures and sells plastic packaging and engineered materials. It was the highest issuer of leveraged loans in the week to September 18. It issued Ba3/BB- rated leveraged loans worth $2.1 billion via the following two tranches:
an RCF (revolving credit facility) worth an undisclosed amount
a $2.1 billion seven-year covenant-lite Term Loan B, issued at LIBOR + 300 basis points with a LIBOR floor of 1.0% and an OID (original issue discount) of 99.5
Berry Plastics will use proceeds of the sale to acquire AVINTIV from the Blackstone Group (BX). Business services provider Ellucian issued leveraged loans worth $1.71 billion via the following two tranches:
An as yet unrated $150 million five-year RCF (revolving credit facility)
A B2/B+ rated $1.56 billion seven-year Term Loan B issued at LIBOR + 375 basis points with a LIBOR floor of 1.0% and an OID (original issue discount) of 99.5
Ellucian raised this loan to finance its leveraged buyout by TPG Capital and Leonard Green Partners.
HealthPort raised leveraged loans worth $117 million last week. The B2/B rated add-on covenant-lite first-lien Term Loan was issued for six years. The loan was issued at LIBOR + 425 basis points with a LIBOR floor of 1.0% and an OID of 99.5%.
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