AccentCare term loan unchanged with ratings cuts; Banijay accelerates deadline

By Sara Rosenberg

New York, April 4 – In the secondary market on Tuesday, AccentCare’s (Pluto Acquisition I Inc.) first-lien term loan held steady following news of ratings downgrades by Moody’s Investors Service.

Meanwhile, in the primary market, Banijay moved up the commitment deadline for its U.S. and euro term loan B, and Nautilus Power LLC approached lenders with an amended and extended term loan B.

AccentCare steady

AccentCare’s first-lien term loan was quoted at 70½ bid, 72 offered on Tuesday, in line with Monday’s levels, following a late Monday downgrades announcement by Moody’s Investors Services, according to a trader.

The term loan was also quoted at 70½ bid, 72 offered on Friday, the trader remarked, adding that the expectation for downgrades was likely already priced into the debt being that it’s trading in the low-70s context.

Moody’s cut the company’s corporate family rating to Caa1 from B3 and senior secured first-lien credit facility rating to Caa1 from B2. The rating outlook remains negative.

The ratings downgrade reflects Moody’s view that AccentCare’s operating performance has deteriorated including very high financial leverage, pressured margins, and weak liquidity, the rating release said.

Moody’s went on to say that it expects AccentCare’s credit metrics will remain strained as a result of ongoing industry-wide clinical labor shortages and certain reimbursement rate increases that may be insufficient in offsetting inflationary cost pressures, and that persistent inflationary cost pressures in a difficult operating environment will result in further weakening of the company’s liquidity. As a result, Moody’s believes that AccentCare’s capital structure could become increasingly unsustainable.

AccentCare, an Advent International portfolio company, is a Dallas-based provider of post-acute health care.

Secondary stronger

In general, the secondary market felt better on Tuesday, with levels up by about an eighth to a quarter of a point, a trader said.

The trader attributed the strength to CLOs buying loans.

Loan indices rise

In other news, IHS Markit’s iBoxx loan indices were higher on Monday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.17% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.16%.

Month to date, the MiLLi is up 0.17% and year to date it is up 3.23%, and the LLLi is up 0.16% month to date and up 3.46% year to date.

Average secondary market bids in the U.S. on Monday were 91.36, up 0.02% from the previous day and down 0.57% year to date.

According to the IHS Markit data, some of the top advancers on Monday were RCN Cable/Astound Broadband’s November 2021 covenant-lite term loan B at 84.83, up from 81.46, Valeant’s May 2022 term loan at 75.83, up from 74.05, and Weber-Stephen’s October 2020 covenant-lite term loan B at 87.63, up from 85.66.

Some top decliners on Monday were Fox US Bidco/Robertshaw’s February 2018 covenant-lite term loan B at 53.04, down from 58, Envision Healthcare/Amsurg’s July 2022 first out covenant-lite term loan at 79.55, down from 83, and Heritage Power’s July 2019 term loan at 30.32, down from 31.30.

Banijay tweaks timing

Moving to the primary market, Banijay accelerated the commitment deadline for its €895 million equivalent U.S. and euro covenant-lite term loan B (B1/B+/BB-) due March 2028 to 8 a.m. ET on Wednesday from noon ET on Wednesday, a market source remarked.

Price talk on the U.S. term loan is SOFR+10 basis points CSA plus 425 bps with a 1% floor and an original issue discount of 97 to 97.5, and talk on the euro term loan is Euribor plus 475 bps with a 0% floor and a discount of 97 to 97.5. Both loans have 101 soft call protection for six months.

BNP Paribas Securities Corp. and Deutsche Bank Securities Inc. are the joint physical bookrunners on the U.S. piece, and Credit Agricole, Natixis and Societe Generale are the joint physical bookrunners on the euro piece. BofA Securities Inc. and Goldman Sachs are passive bookrunners. U.S. Bank is the agent.

Proceeds will be used to amend and extend an existing $449.65 million term loan B due March 2025 priced at Libor plus 375 bps and an existing €453 million term loan B due March 2025 priced at Euribor plus 375 bps.

Banijay Group US Holding Inc. is the U.S. borrower and Banijay Entertainment SAS is the euro borrower.

Banijay is a Paris-based independent content production company.

Nautilus holds call

Nautilus Power emerged in the morning with plans to hold a lender call at 10 a.m. ET on Tuesday to launch a $498,967,244 amended and extended term loan B due Nov. 16, 2026 talked at SOFR+26.161 bps CSA plus 525 bps with a 2% floor and a 50 bps lender consent fee, according to a market source.

Morgan Stanley Senior Funding Inc. is the left lead on the deal that will be used to amend and extend an existing term loan B due May 16, 2024 priced at Libor plus 425 bps with a 1% floor.

The existing term loan is currently sized at $556,896,734 but will be reduced through a $57,929,490 equity contribution in connection with this transaction. The company’s sponsor, Carlyle, purchased $37,929,490 of the term loan B in the fourth quarter of 2022, which will be equitized, and Carlyle will repay $20 million of the term loan in the new extended term loan tranche, pro rata for all consenting lenders, the source said.

Nautilus sponsor loan

In connection with the extension transaction, Carlyle will provide incremental cash to Nautilus’ balance sheet through a $30 million pari passu term loan, funded on the closing date, with a rate of SOFR+ARRC CSA plus 225 bps all PIK.

The extended term loan and the Carlyle term loan will receive a 2% PIK fee on all debt that remains outstanding as of November 2025.

The extended term loan requires a minimum participation of 95% of term loans.

Consents are due at 5 p.m. ET on Thursday, the source added.

Nautilus is a wholesale power generation and marketing company.

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