Hub to launch $1.27 billion incremental loan; funds see Tuesday outflows

By Paul A. Harris

Portland, Ore., Oct. 9 – News volume remained light on Wednesday, as the Yom Kippur holiday thinned the market’s ranks.

Hub International Ltd. announced plans to launch a $1.27 billion non-fungible incremental senior secured term loan B on a lender call.

The daily cash flows of the dedicated bank loan funds were negative on Tuesday, the most recent session for which data was available at press time, according to a market source.

The funds sustained $142 million of outflows on the day, including $7 million of outflows from the bank loan ETFs.

With only Wednesday’s fund flow numbers remaining to go into the tally the combined bank loan funds are tracking $508 million of outflows for the week to Wednesday’s close, the source said.

Leveraged loans were returning 6.12% for the year to Tuesday’s close, the source added, noting that loans are underperforming high yield bonds (10.22% year-to-date), investment grade bonds (13.49% year-to-date) and the S&P 500 (17.2% year-to-date).

Deal pricing

On a quiet Wednesday, with primary market activity muted by the holiday, BellRing Brands LLC finalized pricing on a $625 million five-year first-lien term loan (B2/B) with a 500 basis points spread to Libor atop a 1% Libor floor at an issue price of 97, according to a market source.

Elsewhere, Monotype Imaging Holdings Inc. increased spread talk and cheapened price talk on a downsized $425 million seven-year first-lien term loan (B2/B-).

New pricing sees the spread widen to Libor plus 550 bps from earlier talk of 525 bps and initial talk of 500 bps.

The loan, which is downsized from $440 million, is offered at 95. Discounting was earlier decreased to 98 from 99.

There are also covenant changes.

Meanwhile Buckeye Partners LP moved up timing on its $1.75 billion seven-year covenant-lite first-lien term loan (B1//BB+).

Commitments are due at noon ET on Oct. 16, moved ahead from Oct. 18.

The deal is in the market with price talk of Libor plus 300 bps to 325 bps with a 0% Libor floor and an original issue discount of 99.5.

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