Flutter Entertainment term loan B frees to trade; Citrix, Covetrus deadlines coming up

By Sara Rosenberg

New York, Sept. 16 – Flutter Entertainment plc modified the original issue discount on its well-received term loan B, and then the debt made its way into the secondary market on Friday.

Looking ahead, the week of Sept. 19 brings commitment deadlines for the other two large deals in market – Citrix Systems Inc. (Tibco Software Inc.) and Covetrus Inc. (Corgi BidCo Inc.) – and Brightspeed will be launching a new term loan B to investors.

Flutter tightens

Flutter Entertainment adjusted the original issue discount on its $1.25 billion term loan B due July 2028 (Ba1/BBB-/BBB) to 97.75 from 97, a market source remarked.

As before, the term loan B is priced at SOFR+CSA plus 325 basis points with a 0.5% floor, and has CSA of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate, and 101 soft call protection for one year.

Previously in syndication, the term loan B was upsized from €1 billion equivalent and the company’s euro and U.S. term loan A was upsized to €750 million equivalent from €500 million equivalent, resulting in the cancellation of plans for €500 million of other euro-denominated senior secured debt.

Flutter hits secondary

Commitments for Flutter Entertainment’s term loan B continued to be due at 1 p.m. ET on Friday and the debt broke for trading in the afternoon, with levels quoted at 98 bid, 98¾ offered, another source added.

Barclays is the sole physical bookrunner on the deal. Deutsche Bank is the administrative agent.

The term loans will be used to fund the acquisition of Sisal SpA from CVC Capital Partners Fund VI for €1.913 billion, which was completed on Aug. 4.

Flutter Entertainment is a Dublin-based sports betting and gaming operator. Sisal is an Italian online and retail gaming operator.

Citrix deadline looms

Commitments for Citrix Systems’ $4.05 billion 6.5-year term loan B are due at 5 p.m. ET on Monday, with sources hearing that the loan is already oversubscribed. Allocations are expected on Tuesday, sources added.

The term loan B is talked at SOFR+10 bps CSA plus 450 bps with a 0.5% floor, an original issue discount of 92 and 101 soft call protection for six months.

The company is also getting a $1 billion five-year revolver, a $2.5 billion six-year term loan A and a $500 million equivalent euro 6.5-year term loan B.

As reported previously, the term loan A was recently downsized from a revised amount of $3 billion and an initial size of $3.5 billion as the company’s 6.5-year first-lien secured notes offering was increased to $4 billion from a revised amount of $3.5 billion and an initial size of $3 billion.

The term loans and bonds will be used with $3.95 billion of seven-year second-lien secured debt, $2.5 billion of preferred equity and $6.511 billion of equity to fund the buyout of the company by Vista Equity Partners and Evergreen Coast Capital Corp. for $104.00 in cash per share and merger with Tibco Software Inc., one of Vista’s portfolio companies, repay existing debt at Citrix and Tibco and add cash to the balance sheet.

Citrix lead banks

BofA Securities Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., KKR Capital Markets LLC, Mizuho Bank, Morgan Stanley Senior Funding Inc., RBC Capital Markets, Apollo Global Funding, Jefferies LLC, HSBC Securities (USA) Inc., Macquarie Capital (USA) Inc., Nomura Securities International Inc., Truist Securities Inc., UBS Securities LLC, Wells Fargo Securities LLC, Fifth Third Bank, ING Capital LLC, Intesa Sanpaolo, KeyBanc Capital Markets Inc., MUFG, Natixis, Santander Bank, The Bank of Nova Scotia, Silicon Valley Bank, Societe Generale, Stifel Nicolaus and Co., SPC Capital Markets LLC, TD Securities (USA) LLC and U.S. Bank are the joint lead arrangers and bookrunners on Citrix’s term loan debt.

Net first-lien debt is 5.1x and net total debt is 7x.

Closing is expected during the last week of September, subject to customary conditions.

Citrix is a Fort Lauderdale, Fla.-based provider of secure, unified digital workspace technology. Tibco is a Palo Alto, Calif.-based infrastructure and business intelligence software company.

Covetrus shutting soon

Covetrus’ $1.525 billion seven-year covenant-lite first-lien term loan (B1/B-) has a commitment deadline set for 3 p.m. ET on Monday.

Talk on the term loan is SOFR plus 475 bps to 500 bps with a 0.5% floor, an original issue discount of 95 to 96 and 101 soft call protection for six months.

Deutsche Bank Securities Inc., UBS Investment Bank, BMO Capital Markets, Mizuho Securities USA LLC, TD Securities (USA) LLC, Santander Bank and ING Capital LLC are leading the deal.

The company is also getting a $350 million privately placed second-lien term loan, and based on the commitment letter, the company is expected to get a $300 million five-year revolver as well.

Proceeds will be used with equity to fund the buyout of the company by Clayton, Dubilier & Rice and TPG Capital for $21.00 per share in cash, representing an enterprise value of about $4 billion.

Closing is expected this year, subject to regulatory approvals, Covetrus shareholder approval and other customary conditions.

Covetrus is a Portland, Me.-based animal-health technology and services company.

Brightspeed on deck

Brightspeed set a lender call for 11 a.m. ET on Monday to launch a $2 billion seven-year term loan B, according to a market source.

The term loan B has 101 soft call protection for six months, the source added.

BofA Securities Inc., Barclays, Goldman Sachs Bank USA, Mizuho, BNP Paribas Securities Corp., MUFG, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, BMO Capital Markets, Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc. and RBC Capital Markets are leading the deal that will be used to help fund the acquisition of Lumen Technologies’ incumbent local exchange carrier business in 20 states by Apollo Global Management Inc. for $7.5 billion, with the acquired business being named Brightspeed.

Closing is expected early in the fourth quarter, subject to customary conditions.

Brightspeed is a Charlotte, N.C.-based provider of broadband and telecommunications services.

Fund flows

In other news, Thursday’s actively managed loan fund flows were negative $78 million and Loan ETFs were negative $68 million, sources said.

Sources said that large high-yield bonds outflows resurfaced on Thursday with the market-implied terminal Fed funds rate approaching 4.5%. Actively managed high-yield fund flows were positive $7 million on Thursday and high-yield ETFs were negative $1.09 billion.

Weekly flows for loan funds were an outflow of $954 million, including negative $58 million ETFs.

The past four weeks of outflows for loans total $3.8 billion, which equates to 4.2% of weekly AUM.

Inflows for loan funds year to date total $5 billion, sources added.

Loan indexes

IHS Markit’s iBoxx loan indices declined on Thursday, with the Leveraged Loan indices (MiLLi) closing out the day down 0.03% and the Liquid Leveraged Loan indices (LLLi) closing out the day down 0.01%.

Month to date, the MiLLi is down 0.12% and year to date its down 1.58%. The LLLi is down 0.34% month to date and down 2.75% year to date.

Average secondary market bids in the U.S. on Thursday were 93.69, down 3.26% year to date.

According to the IHS Markit data, some of the top advancers on Thursday were Mallinckrodt’s June 2022 covenant-lite term loan at 83, up from 79.67, Cole Haan’s February 2019 covenant-lite term loan B at 90.50, up from 89.50, and Hornblower’s November 2020 incremental covenant-lite term loan B at 68.50, up from 67.80.

Some top decliners on Thursday were Convergeone’s January 2019 covenant-lite term loan at 76, down from 78.85, Harland Clarke/Vericast’s August 2021 covenant-lite term loan at 70.92, down from 73.15, and Rodan & Fields’ June 2018 covenant-lite term loan B at 47.65, down from 49.05.

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