Howden Group new incremental term loan gains, existing term loan softens in trading

By Sara Rosenberg

New York, March 27 – In the secondary market on Monday, Howden Group Holdings Ltd. (Hyperion Refinance Sarl) saw its new incremental first-lien term loan B move higher from recent break levels and its existing term loan move a little lower.

Howden Group’s new $500 million seven-year incremental covenant-lite first-lien term loan B (B2/B) rose to 98 bid, 99 offered on Monday from levels of 97 bid, 98 offered on the break late Friday, according to a market source.

Meanwhile, the company’s existing 2027 term loan moved to 96¾ bid, 97¾ offered, down a quarter of a point from Friday’s levels, the source said.

“Priced wider than what was indicative for Howden,” the source remarked regarding the new incremental term loan, explaining that the new paper is more attractive because of the spread, which is possibly causing people to sell out of the existing paper and buy into the new paper.

He added that if people are selling the existing for the new, that would put pressure on the existing term loan and push levels lower, and the demand for the new loan would push levels higher.

Howden pricing terms

Howden Group’s new incremental term loan is priced at SOFR plus 400 basis points with a 0.5% floor and was sold at an original issue discount of 96. By comparison, the existing term loan has a spread of 325 bps with a 0.75% floor.

Morgan Stanley Senior Funding Inc., JPMorgan Chase Bank, Barclays, RBC Capital Markets, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Lloyds, NatWest and ING are leading the new loan that will be used to fund pending and future acquisitions, in conjunction with a £300 million incremental equity investment from existing shareholders.

Closing on the incremental term loan is expected in mid-April.

Howden Group is a London-based insurance intermediary group.

Fund flows

In other news, actively managed loan fund flows on Friday were negative $124 million and loan ETFs were negative $22 million, market sources said.

Actively managed high-yield fund flows on Friday were negative $5 million and high-yield ETFs were negative $364 million, sources added.

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