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Tenneco covenant-lite term loan unchanged in sleepy loan market
By Paul A. Harris
Portland, Ore., Aug. 21 – A late summer torpor took hold in the leveraged loan market on Monday.
Among existing paper, the Tenneco Inc. SOFR plus 500 basis points senior secured covenant-lite term loan B (B1) due November 2028 was unchanged on the day, wrapped around issue price at 84 bid, 85¼ offered, according to a debt capital markets banker.
Trading in the $1,243,000,000 loan, which priced last week at 85, has been much more muted than has been the case with the $1.9 billion of Tenneco 8% senior secured notes, also due November 2028.
The notes, which also priced at 85, fell all the way to 81 in the high-yield secondary market, through the end of last week.
Those notes staged a modest recovery on Monday, when they were spotted at 82¼ bid, 83 offered, by a bond trader.
The Tenneco loan and notes came in an effort to syndicate secured bridge debt backing Apollo’s buyout of Tenneco, which had been hung up on dealer balance sheets since late last year.
New deal flow was slow to non-existent on Monday, the banker said.
Terms are expected on the Liquid Tech Solutions LLC fungible $50 million add-on term loan, the source noted.
The deal features a SOFR+CSA plus 475 bps spread with a 0.75% floor and is in the market with discount talk of 98.
Market technicals appear firm to the investment banker who remarked that there remains cash – a good deal of it from the CLOs – to be put to work in leveraged loans.
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