Spirit AeroSystems term loan softens; Colibri revised; EG Group, TransNetwork disclose talk

By Sara Rosenberg

New York, Nov. 1 – Spirit AeroSystems Inc.’s term loan B was a little lower in trading on Wednesday as the company announced third quarter financials that showed larger losses than the prior year’s quarter.

Meanwhile, in the primary market, Colibri increased the size of its incremental first-lien term loan, EG Group released original issue discount talk on its U.S. and euro add-on term loans in connection with its lender call, and TransNetwork LLC came out with pricing guidance on its term loan B.

Furthermore, Greenway Health LLC and Augusta Sportswear Brands joined this week’s new issue calendar.

Spirit Aero dips

Spirit AeroSystems’ term loan B was quoted at 99 5/8 bid, par offered, down an eighth of a point on the day, after the company released third quarter numbers, according to a trader.

For the quarter, the company reported a net loss of $204 million, or $1.94 per diluted share, versus a net loss of $128 million, or $1.22 per diluted share, in the comparable period last year, and an operating loss of $133.7 million, compared to operating income of $4.5 million in the 2022 third quarter.

Revenues for the quarter were $1.439 billion, up from $1.277 billion in the same period last year, and cash used in operations was $111 million, compared to cash used in operations of $36 million in the same quarter of 2022.

The company expects full-year 2023 free cash flow to be a usage between $275 and $325 million, with the outlook reflecting lower projected Boeing 737 deliveries of 345 to 360 units for the year.

Spirit AeroSystems is a Wichita, Kan.-based designer and builder of aerostructures for both commercial and defense customers.

Colibri upsized

Moving to the primary market, Colibri lifted its non-fungible incremental first-lien term loan due March 2029 to $490 million from $400 million, while leaving talk at SOFR plus 500 basis points with a 0.75% floor, an original issue discount of 97.5 and 101 soft call protection for six months, a market source remarked.

Commitments continue to be due at noon ET on Nov. 8, the source added.

Golub Capital and Jefferies LLC are leading the deal. Jefferies is the existing agent.

The incremental term loan will be used to help support an acquisition, and the funds from the upsizing will be used to pay for a new tuck-in acquisition, pay down revolver borrowings, and pay fees and expenses.

Colibri, a Gridiron Capital LLC portfolio company, is a St. Louis-based provider of career lifecycle management and mandatory professional education solutions.

EG Group guidance

EG Group held its lender call on Wednesday morning and announced original issue discount talk of 95 to 95.5 on its fungible $500 million equivalent U.S. and euro senior secured add-on term loan B due February 2028, a market source said. The split of the U.S. and euro add-on term loan tranches is still to be determined.

Like the existing term loans, the U.S. add-on term loan is priced at SOFR plus 550 bps with a 0.5% floor, the euro add-on term loan is priced at Euribor plus 550 bps with a 0% floor, and both loans have 101 soft call protection for six months from Nov. 10.

Commitments are due at 10 a.m. ET on Nov. 9.

Barclays, JPMorgan Chase Bank and BofA Securities Inc. are the physical bookrunners on the deal. Goldman Sachs, HSBC Securities, ING, Lloyds, Morgan Stanley Senior Funding Inc., Rabobank, SMBC and UBS Investment Bank are joint bookrunners. Barclays is the administrative agent.

The add-on loans will be used with other new senior secured debt to partially refinance the company’s remaining 2025 and 2026 debt maturities.

EG Group is a Blackburn, U.K.-based convenience retail and fuel station company.

TransNetwork talk

TransNetwork launched on its morning lender call its $300 million term loan B (B2/B) at talk of SOFR plus 550 bps to 575 bps with a 0.5% floor, an original issue discount of 97 to 97.5 and 101 soft call protection for six months, according to a market source.

Commitments are due at 5 p.m. ET on Nov. 15, the source added.

Truist Securities is leading the deal that will be used to fund the acquisition of PNC Payment Holdings Inc. and to refinance existing debt.

TransNetwork, owned by Flexpoint Ford, GCP Capital Partners and Investar Financial, is a Houston-based payment processor serving the U.S. to Latin America cross-border payment corridor.

Greenway readies deal

Greenway Health set a lender call for 10:30 a.m. ET on Thursday to launch a $375 million 5.25-year first-lien term loan, a market source remarked.

The term loan has 101 soft call protection for one year, the source added.

Jefferies LLC is the left lead on the deal that will be used to refinance existing debt.

Greenway Health is a Tampa, Fla.-based provider of software solutions to office-based physician practices and community health centers.

Augusta on deck

Augusta Sportswear Brands scheduled a lender call for Thursday to launch $390 million of senior secured credit facilities, according to a market source.

The facilities consist of a $50 million revolver and a $340 million term loan, the source added.

Antares Capital LP is leading the deal that will be used to support the buyout of the company by Platinum Equity.

Augusta Sportswear is a Grovetown, Ga.-based supplier of team uniforms and off-field performance wear primarily serving youth and recreational segments.

Fund flows

In other news, actively managed loan fund flows on Tuesday were negative $6 million and loan ETFs were positive $26 million, sources said.

Actively managed high-yield fund flows on Tuesday were negative $58 million and high-yield ETFs were positive $329 million, sources added.

Loan indices lower

S&P Global’s iBoxx loan indices were weaker on Tuesday, with the Leveraged Loan index (MiLLi) closing down 0.03% and the Liquid Leveraged Loan index (LLLi) closing down 0.04%.

Month to date, the MiLLi is down 0.04% and year to date it is up 9.78%, and the LLLi is down 0.22% month to date and up 8.82% year to date.

Average secondary market bids in the United States on Tuesday were 92.89, up 0.03% from the previous day and up 1.11% year to date.

According to the S&P Global data, some of the top advancers on Tuesday were Conterra Ultra Broadband’s April 2019 covenant-lite term loan at 98, up from 95.05, Petmate/Doskocil’s October 2021 incremental covenant-lite term loan B at 60.15, up from 59.12, and Forming Machining/Atlas Group’s October 2018 covenant-lite term loan at 80.8, up from 80.

Some top decliners on Tuesday were Audio Visual Services’ February 2018 second-lien covenant-lite term loan at 85.67, down from 90, Cano Health’s January 2022 covenant-lite term loan at 57.57, down from 59.21, and Weight Watchers’ April 2021 covenant-lite term loan at 70.67, down from 72.38.

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