Kenan Advantage term loan frees to trade; Blackhawk Network, Arcis Golf guidance surfaces

By Sara Rosenberg

New York, May 2 – Kenan Advantage Group Inc.’s incremental first-lien term loan made its way into the secondary market on Tuesday, with levels quoted above its original issue discount.

And, in the primary market, Blackhawk Network Holdings Inc. released price talk on its term loan B in connection with its lender call, and Arcis Golf LLC came out with original issue discount guidance on its funded and delayed-draw term loans.

Kenan hits secondary

Kenan Advantage Group’s non-fungible $300 million incremental covenant-lite first-lien term loan (B2/B) due March 24, 2026 freed to trade on Tuesday morning, with levels quoted at 99½ bid, par offered, a market source remarked.

Pricing on the incremental term loan is SOFR+CSA plus 400 basis points with a 0.75% floor and it was sold at an original issue discount of 99. CSA is 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate. The debt has 101 soft call protection for six months and amortization of 1% per annum.

During syndication, the incremental term loan was upsized from $250 million and the discount was tightened from 98.5.

KeyBanc Capital Markets LLC, Barclays, Citizens, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., CIBC, Fifth Third, ING, MUFG and Regions Capital are leading the deal that will be used with cash on hand to refinance a $300 million second-lien term loan due 2027. The amount of cash being used for the refinancing was reduced as a result of the recent incremental term loan upsizing.

Kenan Advantage is a North Canton, Ohio-based provider of liquid bulk transportation services to the fuels, chemicals, liquid foods and merchant gas markets.

Blackhawk guidance

Blackhawk Network held its lender call on Tuesday morning and announced price talk on its $1.75 billion seven-year term loan B at SOFR plus 400 bps to 425 bps with a 0% floor and an original issue discount of 98 to 98.5, according to a market source.

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

Commitments are due at 10 a.m. ET on Friday, the source added.

BofA Securities Inc. is the left lead on the deal that will be used with cash from the balance sheet to repay the company’s existing first-lien term loan B due 2025 and existing second-lien term loan due 2026.

Blackhawk Network is a Pleasanton, Calif.-based financial technology company and provider of payment solutions, including gift cards, incentive cards and other digital payment solutions.

Arcis OID talk

Arcis Golf released original issue discount talk of 98.75 to 99 on its $160 million incremental covenant-lite term loan B due Nov. 24, 2028 and $40 million covenant-lite delayed-draw term loan due Nov. 24, 2028 with its morning lender call, a market source remarked.

As previously reported, price talk on the term loans is SOFR+CSA plus 425 bps with a 0.5% floor. CSA is ARRC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

Ticking fees on the delayed-draw term loan are half the spread starting on day 46 and the full spread starting on day 91.

Commitments are due at noon ET on May 9.

Deutsche Bank Securities Inc., JPMorgan Chase Bank and Wells Fargo Securities LLC are leading the $200 million of term loans (B2/B+).

The incremental term loan will be used to fund the acquisition of Pac Life and the delayed-draw term loan will be used to fund the acquisition of Project Pine.

Arcis is a Dallas-based owner and operator in the U.S. golf market with 30 private and 35 daily fee clubs.

Fund flows

In other news, actively managed loan fund flows on Monday were negative $30 million and loan ETFs were positive $66 million, market sources said.

Inflows for loan funds week-to-date total an estimated $65 million, versus outflows in the prior week of $717 million, sources added.

Leveraged loan funds have reported 14 consecutive weekly outflows and 35 outflows in the last 36 weeks.

Loan indices soften

IHS Markit’s iBoxx loan indices were weaker on Monday, with the Leveraged Loan indexes (MiLLi) closing out the day down 0.01% and the Liquid Leveraged Loan indices (LLLi) closing out the day down 0.08%.

Month to date, the MiLLi is down 0.01% and year to date it is up 4.04%, and the LLLi is down 0.08% month to date and up 4.37% year to date.

Average secondary market bids in the U.S. on Monday were 91.54, unchanged from the previous day and down 0.37% year to date.

According to the IHS Markit data, some of the top advancers on Monday were U.S. Renal Care’s June 2019 term loan B at 66.50, up from 62.90, Anchor Glass’ July 2017 covenant-lite term loan at 73.88, up from 70.20, and Hearthside Food’s November 2018 incremental covenant-lite term loan B2 at 80.94, up from 78.13.

Some top decliners on Monday were National CineMedia’s June 2018 term loan B at 30.75, down from 34.02, Imperva’s January 2019 covenant-lite term loan at 84.38, down from 92.71, and Genesis Care’s March 2020 U.S. covenant-lite term loan B at 29.07, down from 30.5.

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