Ciena frees to trade; APi Group lifted with paydown news; Greenway softens with downgrade

By Sara Rosenberg

New York, Jan. 12 – Ciena Corp. increased the size of its term loan B, lowered the spread and tightened the original issue discount, and then the debt made its way into the secondary market on Thursday.

Also, APi Group Corp.’s 2021 term loan was a little higher in trading after the company announced that it recently repaid some of the debt, and Greenway Health LLC’s term loan moved lower following a downgrade by Moody’s Investors Service of the company’s corporate family and senior secured bank credit facilities ratings.

In more happenings, Nord Anglia Education (Fugue Finance) joined this week’s primary calendar with U.S. and euro term loans that will extend and refinance existing first-lien term loan debt.

Ciena reworked, breaks

Ciena raised its seven-year term loan B to $500 million from $400 million, trimmed pricing to SOFR plus 250 basis points from SOFR plus 275 bps and adjusted the original issue discount to 99.5 from 99, a market source remarked.

As before, the term loan has a 0% floor, 101 soft call protection for six months and no CSA.

Recommitments were due at noon ET on Thursday and the term loan freed to trade in the afternoon, with levels quoted at 99¾ bid, par ½ offered, another source added.

BofA Securities Inc., JPMorgan Chase Bank, Goldman Sachs Bank USA, Wells Fargo Securities LLC Citigroup Global Markets Inc. and MUFG are leading the deal that will be used to support the roughly $210 million acquisition of Tibit Communications Inc., a Petaluma, Calif.-based provider of open, microplug OLT technology that enables rapid PON deployment, the recently completed acquisition of Benu Networks Inc., a Burlington, Mass.-based provider of cloud-native software solutions, to add cash to the balance sheet and for general corporate purposes.

Closing on the Tibit transaction is expected during Ciena’s fiscal first-quarter 2023.

Ciena is a Hanover, Md.-based networking systems, services and software company.

APi inches up

APi Group’s 2021 term loan moved up to 99 7/8 bid, par ¼ offered on Thursday from 99 5/8 bid, par offered on Wednesday as the company revealed its repaid $100 million of the debt this month, according to a market source.

The company also repaid $100 million of its 2019 term loan this month, but that loan was unchanged on the news, with levels quoted at 99 7/8 bid, par ¼ offered, the source added.

Russ Becker, president and chief executive officer of APi, said in a news release that the company is focused on cash generation and deleveraging at about one turn annually so as to reach a stated target net leverage ration of 2x to 2.5x.

APi is a New Brighton, Minn.-based business services provider of safety, specialty and industrial services.

Greenway dips

Greenway Health’s term loan was quoted by one market source at 65 bid, 70 offered on Thursday. The debt was quoted by a different source at 68 bid, 72 offered on Wednesday prior to a downgrade by Moody’s Investors Service of the company’s corporate family rating and senior secured bank credit facilities to Caa1 from B3, with a negative outlook.

Moody’s said that the ratings downgrade and the negative outlook reflect the increasing refinancing risks that Greenway is facing in addressing the February 2024 maturity of its term loan. Following weaker operating performance over the past few years, Moody’s views the company’s ability to restore organic revenue growth as uncertain and expects negative free cash flow in 2023. This combined with challenging debt market conditions could impair the company’s ability to refinance timely with favorable economic terms.

Greenway is a Tampa, Fla.-based provider of healthcare software solutions and services.

Nord Anglia on deck

Back in the primary market, Nord Anglia Education set a lender call for 10 a.m. ET on Friday to launch a $500 million term loan B due January 2028 and an up to $1.4 billion equivalent euro term loan B due January 2028, according to a market source. Small group question and answer meetings will be available on Monday and Tuesday.

The euro term loan has a 0% floor and no amortization, the U.S. term loan has a 0.5% floor and amortization of 1% per annum, and both term loans have 101 soft call protection for six months, the source said. Spread and original issue discount talk are not yet available, but there will be no margin step-downs in either term loan.

Commitments for the U.S. term loan are due at 5 p.m. ET on Jan. 25 and commitments for the euro term loan are due at noon ET on Jan. 25, the source added.

Nord Anglia leads

Deutsche Bank Securities Inc. and JPMorgan Chase Bank are joint physical bookrunners on Nord Anglia’s U.S. term loan, and HSBC is a joint bookrunner. HSBC, Deutsche Bank and JPMorgan are joint physical bookrunners on the euro term loan. Mandated lead arrangers on the loans are Citigroup Global Markets Inc., DBS, Goldman Sachs, Morgan Stanley Senior Funding Inc., Standard Chartered, BofA Securities Inc. and E. Sun. HSBC is the administrative agent.

The new loans will be used to extend and refinance the company’s existing U.S. and euro first-lien term loans due September 2024.

BPEA EQT and CPP Investments are the sponsors.

Nord Anglia is a London-based K-12 schools platform.

Fund flows

In other news, actively managed loan fund flows on Wednesday were negative $61 million and loan ETFs were positive $2 million, market sources said.

The tracking estimate for Thursday night’s Lipper numbers for loans are outflows totaling $250 million, sources continued. These would be the lightest outflows for leveraged loan funds in a few months.

Actively managed high-yield fund flows on Wednesday were negative $96 million and high-yield ETFs were negative $244 million.

The tracking estimate for Thursday night’s Lipper numbers for high-yield are inflows totaling $2.1 billion, sources added. These would be the largest inflows for the high-yield asset class in a few months.

Loan indices rise

IHS Markit’s iBoxx loan indices were stronger on Wednesday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.18% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.16%.

Month to date, the MiLLi is up 1.36% and the LLLi is up 1.64%.

Average secondary market bids in the U.S. on Wednesday were 92.25, up 0.03% from the previous day and up 0.39% year to date.

According to the IHS Markit data, some of the top advancers on Wednesday were National Mentor/Civitas’ March 2021 covenant-lite term loan at 74.13, up from 71.75, Liftoff Mobile/Vungle’s September 2021 covenant-lite term loan B at 63.92, up from 61.92, and Western Dental’s August 2021 term loan B at 93.83, up from 91.13.

Some top decliners on Wednesday were Jo-Ann Stores’ July 2021 covenant-lite term loan B at 59.40, down from 61, National CineMedia’s June 2018 term loan B at 22.88, down from 23.45, and Loyalty Ventures’ November 2021 covenant-lite term loan B at 38.43, down from 39.38.

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