Walker & Dunlop, Altice USA free to trade; Aventiv term loan drops after downgrade

By Sara Rosenberg

New York, Dec. 14 – Walker & Dunlop Inc. set the spread on its incremental term loan B-2 at the low end of guidance and tightened the original issue discount, and then the debt freed up for trading on Wednesday afternoon.

Additionally, Altice USA (CSC Holdings LLC) firmed the size on its extended term loan B-6 and then broke for trading as well.

Furthermore, Aventiv Technologies LLC (Securus Technologies Holdings Inc.) saw its term loan drop considerably in the secondary market in reaction to a ratings downgrade that was announced late in the previous session.

Walker tweaked

Walker & Dunlop firmed pricing on its non-fungible $200 million incremental senior secured term loan B-2 (BB+) at SOFR plus 300 basis points, the low end of the SOFR plus 300 bps to 325 bps talk, and moved the original issue discount to 98 from 97.5, according to a market source.

As before, the incremental term loan has CSA of 10 bps one-month rate, 15 bps three-month rate and 25 bps six-month rate, a 0.5% floor, 101 soft call protection for six months and a ticking fee of the full margin starting on day 31.

JPMorgan Chase Bank is leading the deal of which $115 million of the proceeds will be used to refinance debt assumed in the acquisition of Alliant Capital and $85 million of proceeds will be used to strengthen the company’s balance sheet for general corporate purposes.

Pro forma for the transaction, the company’s outstanding principal balance of term loan borrowings will be $795 million.

Walker hits secondary

Recommitments for Walker & Dunlop’s incremental term loan were due at noon ET on Wednesday, and the debt broke for trading in the afternoon, with levels quoted at 98½ bid, 99¼ offered, another source added.

With this transaction, the company is amending its existing credit agreement, to allow for a pari passu revolver and increase the excess cash flow sweep thresholds by 0.75x of leverage throughout.

Existing term loan B lenders were offered a 5 bps fee for amendment consents.

Closing is expected in January.

Walker & Dunlop is a Bethesda, Md.-based commercial real estate and multi-family finance company.

Altice USA updated, breaks

Altice USA set the size on its extended term loan B-6 due January 2028 at $2.008 billion and left pricing at SOFR plus 450 bps with a 0% floor and an original issue discount of 98, a market source remarked.

The extended term loan has 101 soft call protection for one year and no CSA.

During syndication, J-Crew, Chewy and Serta protections were added, and MFN, assets sales and restricted payments were revised.

JPMorgan Chase Bank is leading the deal that will be used to extend a portion of the company’s existing $2.835 billion term loan B-1 due 2025 and existing $1.227 billion term loan B-3 due 2026, both priced at Libor plus 225 bps with a 0% floor.

The term loan B-6 freed to trade during the session, with levels quoted at 94 bid, 95 offered, another source added. The non-extended term loan B-1 and term loan B-3 were both quoted at 94 bid.

Altice USA is a broadband communications and video services provider.

Aventiv falls

Aventiv’s 2024 first-lien term loan softened in trading on the back of a ratings downgrade by S&P Global Ratings late in the day on Tuesday.

One trader had the term loan quoted at 74 bid, 79 offered on Wednesday, down from 83½ bid, 85½ offered prior to the downgrade on Tuesday, and a second trader had the loan quoted at 77 bid, 80 offered, down from 84 bid, 86 offered prior to the downgrade. Both traders had not updated levels on Tuesday after the downgrade was announced.

S&P cut Aventiv’s issuer credit rating to CCC+ from B- and revised the outlook to negative due to the expectation that the company will face continued pressure in discretionary spending and growing interest rates, which will lead to negative free cash flow over the next 12 months and elevated leverage of mid-7x.

Aventiv refinancing risk

S&P also said in the downgrade announcement that it believes Aventiv will face difficulty refinancing its capital structure prior to the maturity of its revolver in August 2024 and first-lien term loan in November 2024.

“Capital market conditions could make refinancing the company’s capital structure challenging as a recession becomes exceedingly likely in the next 12 months. If the company can secure funding in this poor macroenvironment, terms would almost certainly be less favorable compared to the current debt,” S&P added in the release.

Aventiv is a Dallas-based provider of inmate telecommunications services.

Fund flows

In other news, actively managed loan fund flows on Tuesday were negative $187 million and loan ETFs were negative $8 million, market sources said.

Actively managed high-yield fund flows on Tuesday were negative $139 million and high-yield ETFs were positive $104 million, sources added.

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