Loan trading levels see some recovery from recent weakening as equities improve

By Sara Rosenberg

New York, Aug. 27 – The secondary loan market in general felt stronger by about an eighth to a quarter of a point on Thursday as levels were rebounding from recent losses suffered in sympathy with equities coming under pressure, according to a trader.

One name that benefited from the improved tone was Cengage Learning Holdings II Inc., with its term loan moving to par bid, 100¾ offered from 99¾ bid, 100¼ offered, the trader said.

Cengage did come out with some news on Thursday regarding a stock repurchase, but that announcement was not seen as the impetus behind the strengthening in levels, the trader added.

The company disclosed that it has been authorized to opportunistically repurchase up to $25 million of its outstanding common stock over the next 12 months.

The actual timing, number and value of shares repurchased will be determined by management and will depend on a number of factors, including the price at which the shares are available, assessment of alternative uses of cash, general market and economic conditions and compliance with applicable legal requirements as well as the terms of the company’s credit facilities.

Cengage is a Boston-based educational content, technology, and services company for the higher education and K-12, professional and library markets.

KIK Custom closes

In other news, the buyout of KIK Custom Products Inc. (Kronos Acquisition Holdings Inc.) by Centerbridge Partners LP from CI Capital Partners has been completed, a news release said.

To help fund the transaction, KIK got a new $1,075,000,000 credit facility that includes a $225 million five-year asset-based revolver and an $850 million seven-year senior secured covenant-light term loan (B2/B-).

Pricing on the term loan is Libor plus 500 basis points with a 1% Libor floor, and it was sold at an original issue discount of 97.5. The debt has 101 soft call protection for one year.

During syndication, pricing on the term loan was increased from talk of Libor plus 450 bps to 475 bps, the discount was revised from 99, and the call protection was extended from six months.

Barclays, BMO Capital Markets Corp., Nomura Securities International Inc. and Macquarie Capital (USA) Inc. led the deal.

Net first-lien leverage is 4.1 times, and net total leverage is 5.9 times.

KIK is a Toronto-based developer and marketer of pool and spa treatment products and a manufacturer of household and personal care products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.