Delek frees to trade; Zayo term loan falls; Formula 1, Four Seasons, Ingenovis join calendar

By Sara Rosenberg

New York, Nov. 10 – Delek US Holdings Inc.’s term loan B made its way into the secondary market on Thursday, with levels quoted above its original issue discount, and Zayo Group Holdings Inc.’s term loan was softer with earnings news.

Meanwhile, in the primary market, Formula 1, Four Seasons Hotels and Resorts and Ingenovis Health Inc. joined the near-term new issue calendar with plans to launch new term loans.

Delek breaks

Delek’s $950 million seven-year covenant-lite term loan B (B1/BB+/BB+) freed to trade late in the day Thursday, with levels quoted at 96½ bid, 97¼ offered, according to a market source.

Pricing on the term loan is SOFR+10 basis points CSA plus 350 bps with a 0.5% floor and it was sold at an original issue discount of 96. The debt has 101 soft call protection for six months.

Wells Fargo Securities LLC and MUFG are leading the deal that will be used with cash on the balance sheet and ABL facility borrowings to refinance an existing term loan B due 2025 and add-on term loan B due 2025.

Delek is a Brentwood, Tenn.-based owner and operator of crude oil and refined products logistics and marketing assets.

Zayo retreats

Zayo Group’s term loan dropped to 78 bid, 80 offered on Thursday from 80¾ bid, 81¾ offered on Wednesday, market sources said.

One trader linked the term loan’s softening to the company’s release of earnings numbers.

Zayo is a Boulder, Colo.-based provider of bandwidth infrastructure.

Secondary gains

The secondary market in general was up about three quarters of a point to a full point on the back of Consumer Price Index (CPI) numbers coming in lower-than-expected, according to a market source.

CPI rose 0.4% in October on a seasonally adjusted basis, the same increase as in September, the U.S. Bureau of Labor Statistics reported on Thursday.

Over the last 12 months, the all items index increased 7.7% before seasonal adjustment, compared to 8.2% in September.

Formula 1 readies deal

Moving to the primary market, Formula 1 surfaced with plans to hold a lender call at 11 a.m. ET on Monday to launch $2.425 billion of term loans, a market source remarked.

The debt is split between a $725 million term loan A and a $1.7 billion term loan B, the source added.

Goldman Sachs Bank USA and JPMorgan Chase Bank are leading the deal that will be used with cash on the balance sheet to refinance an existing term loan B due February 2024.

Formula 1 is a media company that is the exclusive commercial rights holder to FIA Formula One World Championship auto racing.

Four Seasons on deck

Four Seasons Hotels and Resorts will hold a lender call at 11 a.m. ET on Monday to launch an $850 million term loan B, according to a market source.

Citigroup Global Markets Inc. is leading the deal.

Four Seasons is a Toronto-based luxury hotels company.

Ingenovis coming soon

Ingenovis Health set a lender call for 10 a.m. ET on Monday to launch a non-fungible $85 million covenant-lite incremental first-lien term loan due March 6, 2028, a market source said.

Citizens Bank is leading the deal that will be used to fund an acquisition.

Cornell Capital and Trilantic North America are the sponsors.

Ingenovis, formerly known as CCRR Parent Inc., is a provider of travel nurse, Allied, Rapid Response, Locum Tenens and labor dispute preparedness talent services to healthcare facilities.

Fund flows

In other news, actively managed loan fund flows on Wednesday were negative $38 million and loan ETFs were negative $6 million, according to market sources.

The tracking estimate for Thursday night’s weekly Lipper numbers for loans are outflows totaling $525 million. High-yield’s estimate for Thursday night’s weekly Lipper numbers are inflows totaling $1.23 billion.

Loan funds are tracking an outflow for 21 times in the last 22 weeks. By comparison, high yield’s past three weeks inflows totaling $8.3 billion are the largest stretch of inflows since June 2020, sources added.

Loan indices mixed

IHS Markit’s iBoxx loan indices were mixed on Wednesday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.01% and the Liquid Leveraged Loan indices (LLLi) closing out the day down 0.12%.

Month to date, the MiLLi is up 0.62% and year to date its down 2.15%. The LLLi is up 0.59% month to date and down 2.87% year to date.

Average secondary market bids in the U.S. on Wednesday were 92.42, unchanged from the previous day and down 4.57% year to date.

According to the IHS Markit data, some of the top advancers on Wednesday were Clarion Events’ February 2018 covenant-lite term loan B2 at 63.30, up from 60.57, Loyalty Ventures’ November 2021 covenant-lite term loan B at 36.40, up from 35.20, and National CineMedia’s June 2018 term loan B at 40.95, up from 39.71.

Some top decliners on Wednesday were Cineworld’s February 2018 U.S. covenant-lite term loan at 28.13, down from 31.81, AMC Entertainment’s April 2019 covenant-lite term loan B at 60, down from 66.25, and Endo Pharmaceuticals’ March 2021 covenant-lite RSA term loan B at 79.25, down from 80.59.

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