Culligan, Cerence sweeten deals, loan funds see Friday outflows

By Paul A. Harris

Portland, Ore., Sept. 30 – In Monday’s leveraged loan market, Culligan Holding Inc. (AI Aqua Merger Sub Inc.) and Cerence Inc. came with deal terms favoring lenders.

The daily cash flows of the dedicated bank loan funds saw $85 million of outflows on Friday, all of it coming out of actively managed bank loan funds, according to a market source. Bank loan ETFs were absolutely flat on the day, the source said.

In the bank loan index, 34.1% of loans were trading above par, at the end of last week, according to a market source citing a report from JPMorgan. On succeeding price tiers, 25.62% trade between 99.00 and 99.99, 10.3% trade between 98.00 and 98.99 and 29.97% trade below 98.00.

Culligan, Cerence sweeten

In primary market news, Culligan Holding revised price talk cheaper on its fungible $200 million incremental covenant-lite term loan B (B2/B-) due December 2023.

Revised talk has the loan coming at a discount of 95 to 96, changed from earlier talk of 97.

Spread talk is unchanged at Libor plus 425 basis points with a 1% Libor floor.

Commitments are due at noon ET on Tuesday.

Cerence priced a downsized $270 million five-year first-lien term loan B with a 600 bps spread to Libor atop a 1% Libor floor at 94.

The loan size decreased from $300 million after having previously been decreased from $425 million.

The spread came on top of final spread talk that had widened from earlier talk of 525 bps. Earlier talk was 425 to 450 bps. Initial talk had the loan coming with a 375 bps spread to Libor.

The discount came cheap to final discount talk of 95. That talk extended the discount from earlier price talk of 98. Prior to that the deal was talked at 99. Initial price talk was 99 to 99.5.

Elsewhere, PeroxyChem priced and its $315 million first-lien term loan B at 99.5, 500 bps spread to Libor and a 0% Libor floor, according to a market source who added that the deal allocated.

Topps Co. Inc. set the margin on its $125 term loan B 24-month extension at a 525 bps spread to Libor.

The spread on the existing loan is 600 bps.

And Six Flags Theme Parks Inc. plans to launch a repricing of $798 million of term loan B paper (existing ratings Ba1/BBB-) on a lender call scheduled to get underway at 10 a.m. ET on Tuesday.

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