uploads///US Leveraged Loan Market Volumes

Leveraged Loan Issuance Gained Traction Last Week



Primary market activity in leveraged loans

According to data from S&P Capital IQ Leveraged Commentary & Data, the US leveraged loans market saw an allocation of $5.0 billion worth of dollar-denominated senior loans in the week ended May 20, 2016. In the previous week, issuance had stood at $2.5 billion.

The deal flow rose from five priced transactions in the previous week to six priced transactions in the week ended May 20, 2016.

Leveraged loan issuances rose last week amid favorable market conditions. Most issuances were made for refinancing purposes.

Senior loans are tracked by mutual funds and ETFs such as the Hartford Floating Rate Fund Class A (HFLAX), the Fidelity Advisor Floating Rate High Income Fund Class A (FFRAX), the Invesco PowerShares Senior Loan Portfolio ETF (BKLN) and the Highland/iBoxx Senior Loan ETF (SNLN).

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Noteworthy transactions

Cision provides public relations software and services, including content marketing, media monitoring, media list building, distribution, and analysis. It issued leveraged loans worth $1.5 billion in two tranches on May 17, 2016:

  • a $1.1 billion B1/B+ rated seven-year first-lien term loan, issued at LIBOR (Intercontinental Exchange London Interbank Offered Rate) plus 600 basis points, with a LIBOR floor of 1.0% and an OID (original issue discount) of 98
  • a $370 million second-lien term loan

The proceeds from these offerings will be used for Cision’s acquisition of PR Newswire.

Pilot Travel Centers operates travel centers and travel plazas in North America. It issued a Term Loan B worth $1.4 billion on May 18, 2016.

The Ba2/BB+ rated loan was issued for seven years at LIBOR plus 275 basis points, with an OID of 99.5. The company expects to use the proceeds of the loan for refinancing purposes.

Nexeo Solutions supplies raw materials used in a broad cross-section of industries including chemical manufacturing, oil and gas, coatings, adhesives, paints, personal care, automotive, and healthcare.

Nexeo issued a covenant-lite Term Loan B worth $655 million on May 17, 2016. The B3/B rated add-on term loan was issued for seven years at LIBOR plus 425 basis points, with a LIBOR floor of 1.0% and an OID of 99.5. The proceeds from the offerings will be used for leveraged buyout purposes.

In the next article, we’ll look at leveraged loan fund flows.


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