SiteOne add-on loan frees to trade; Galderma rises with upgrade, general market strength

By Sara Rosenberg

New York, July 7 – SiteOne Landscape Supply Holding LLC’s add-on term loan made its way into the secondary market on Friday, with levels quoted above its original issue discount.

Also, Galderma’s first-lien term loan inched higher in trading as the company’s corporate family and senior secured credit facilities ratings were upgraded by Moody’s Investors Service, and the market in general was stronger.

Meanwhile, in the primary market, Ontic (Bleriot US Bidco Inc.) joined the near-term new issue calendar with an amendment and extension, and incremental term loan transaction.

SiteOne starts trading

SiteOne Landscape Supply’s fungible $120 million add-on term loan freed to trade on Friday, with levels quoted at 99½ bid, par ¼ offered, according to a market source.

Pricing on the add-on term loan is SOFR+CSA plus 200 basis points with a 0.5% floor, and it was sold at an original issue discount of 99.03. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

JPMorgan Chase Bank is leading the deal that will be used to pay down ABL borrowings and for general corporate purposes.

SiteOne is a Roswell, Ga.-based distributor of wholesale irrigation, landscape lighting, nursery, hardscapes, maintenance products and supplies for the green industry.

Galderma gains

Galderma’s first-lien term loan moved up to 99 7/8 bid, par 1/8 offered on Friday from 99½ bid, par offered on Thursday as the company’s ratings were lifted by Moody’s, and the general market was “pretty well bid” and up by about a quarter of a point on the day, a trader remarked.

The company’s corporate family rating was changed to B2 from B3 and its senior secured credit facilities rating was raised to B1 from B2. The stable outlook was unchanged.

Moody’s said that the upgrade reflects the company’s strong trading since inception in 2019 and prospects for solid growth supported by positive market dynamics, strong market positions and its late-stage pipeline of new products; private placement of around $1 billion of new equity which Moody’s expects will be fully applied to prepay debt, alongside the company’s plans to carry out an initial public offering; and, expectations that the company’s leverage will reduce to below 6.5x on a Moody’s-adjusted basis by December 2023 and to well below 6x over the next 12 to 18 months.

Galderma is a Switzerland-based skincare company.

Ontic readies deal

Moving to the primary market, Ontic set a lender call for 11 a.m. ET on Monday to launch up to $1.022 billion of credit facilities, according to a market source.

The facilities consist of an $85 million revolver due July 2028 and an up to $937 million covenant-lite first-lien term loan B, inclusive of an incremental $100 million term loan, due October 2028, the source said.

The term loan has 101 soft call protection for six months.

Commitments are due at noon ET on July 19, the source added.

Nomura Securities, Barclays, Macquarie Capital (USA) Inc. and KKR Capital Markets are leading the deal that will be used to extend an existing revolver from October 2024 and an existing term loan B from October 2026, and the incremental term loan will repay outstanding revolver borrowings and fund general corporate purposes.

Ontic is a provider of OEM-licensed parts and aftermarket services for mature aerospace and defense platforms.

Fund flows

In other news, actively managed loan fund flows on Thursday were negative $13 million and loan ETFs were negative $90 million, market sources said.

Loan funds reported weekly inflows totaling $53 million, including positive $314 million ETFs. This was only the fourth inflow over the past 52 weeks with dedicated loan fund AUM of $89.4 billion down 37% from $142.4 billion in May 2022, sources continued.

June’s outflows totaled $491 million, compared to outflows of $4.4 billion in May, $3.1 billion in April, $6 billion in March, $2.6 billion in February and $2.3 billion in January.

Outflows for loan funds year to date total $18.9 billion, with negative $1 billion ETFs, sources added.

Loan indices rise

In other news, IHS Markit’s iBoxx loan indices were stronger on Thursday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.06% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.05%.

Month to date, the MiLLi is up 0.28% and year to date it is up 6.53%, and the LLLi is up 0.23% month to date and up 6.39% year to date.

Average secondary market bids in the U.S. on Thursday were 91.77, up 0.02% from the previous day and down 0.12% year to date.

According to the IHS Markit data, some of the top advancers on Thursday were MultiPlan’s August 2021 covenant-lite term loan B at 91.88, up from 89.08, National Mentor/Civitas’ March 2021 covenant-lite term loan at 77.75, up from 75.43, and Amneal Pharmaceuticals’ May 2018 covenant-lite term loan at 95.56, up from 94.

Some top decliners on Thursday were Diamond Sports/Sinclair/Regional Sports’ March 2022 first priority term loan at 75, down from 76.56, Sound Physicians’ June 2018 term loan at 57.23, down from 58.41, and Mitel Networks’ October 2022 first-out new money term loan at 83.75, down from 85.

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