RelaDyne modifies issue price, frees to trade; Howden quick-to-market term loan breaks

By Sara Rosenberg

New York, March 24 – RelaDyne Inc. (AIP RD Buyer Corp.) widened the original issue discount on its add-on first-lien term loan B-2, and then the debt made its way into the secondary market on Friday, with levels quoted above the revised discount price.

Also, Howden Group Holdings Ltd. (Hyperion Refinance Sarl) held a lender call in the morning to launch an incremental first-lien term loan B, and the debt allocated and started trading in the afternoon.

RelaDyne tweaked, trades

RelaDyne changed the original issue discount on its fungible $350 million add-on first-lien term loan B-2 (B2) due December 2028 to 95 from talk in the range of 96.5 to 97, according to a market source.

Like the existing $250 million term loan B-2 due December 2028, the add-on term loan B-2 is SOFR plus 500 basis points with a 0.5% floor and no CSA.

The add-on term loan B-2 has 101 soft call protection for six months.

Commitments continued to be due at noon ET on Friday and the add-on term loan freed to trade in the afternoon, with levels quoted at 95½ bid, 96½ offered, a trader added.

RBC Capital Markets, BMO Capital Markets, KeyBanc Capital Markets, Macquarie Capital (USA) Inc., U.S. Bank and Fifth Third are leading the deal that will be used to fund the acquisition of Sun Coast Resources, a specialty distribution and logistics provider primarily focused on distributing diesel and lubricants and providing logistics services to support a diverse customer base across the Texas/Gulf Coast region.

RelaDyne is a Cincinnati-based provider of lubricant and fuel sales & distribution and equipment reliability services to the industrial, commercial and automotive industries.

Howden launches, frees

Howden Group surfaced in the morning with plans to hold a lender call at 10 a.m. ET to launch a $500 million seven-year incremental covenant-lite first-lien term loan B (B2/B) at SOFR plus 400 bps with a 0.5% floor, an original issue discount of 96 and 101 soft call protection for six months, a market source remarked.

Commitments were due at 2 p.m. ET on Friday, after which pricing finalized in line with talk and the debt broke for trading, with levels quoted at 97 bid, 98 offered, a trader added.

Morgan Stanley Senior Funding Inc., JPMorgan Chase Bank, Barclays, RBC Capital Markets, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Lloyds, NatWest and ING are leading the deal that will be used to fund pending and future acquisitions, in conjunction with a £300 million incremental equity investment from existing shareholders.

Closing is expected in mid-April.

Howden Group is a London-based insurance intermediary group.

Fund flows

In other news, actively managed loan fund flows on Thursday were negative $155 million and loan ETFs were $0, market sources said.

Loan funds reported weekly outflows totaling $1.74 billion, including negative $280 million ETFs. These were the largest withdrawals for loan funds since the final week of September and the fourteenth largest on record, sources continued.

Leveraged loan funds have reported 30 outflows in the last 31 weeks with actively managed funds enduring a forty sixth consecutive weekly withdrawal.

Dedicated loan fund AUM is $96 billion, down from $142 billion in May 2022.

Outflows for loan funds in 2023 total $8.6 billion, compared to $12.8 billion of outflows in 2022, sources added.

Loan indices rise

IHS Markit’s iBoxx loan indices were higher on Thursday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.1% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.22%.

Month to date, the MiLLi is down 0.92% and year to date it is up 2.25%, and the LLLi is down 0.75% month to date and up 2.15% year to date.

Average secondary market bids in the U.S. on Thursday were 91.12, up 0.01% from the previous day and down 0.83% year to date.

According to the IHS Markit data, some of the top advancers on Thursday were Vantage Specialty’s October 2017 covenant-lite term loan at par, up from 96.97, Genesis Care’s March 2020 U.S. covenant-lite term loan B at 25.64, up from 25.13, and AMC Entertainment’s April 2019 covenant-lite term loan B at 68.38, up from 67.2.

Some top decliners on Thursday were Driven Performance/Holley Performance’s November 2021 term loan at 81.08, down from 83.83, Lucky Bucks’ July 2021 covenant-lite term loan at 31.81, down from 32.88, and Associated Asphalt’s April 2017 term loan B at 76.6, down from 79.

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