2U breaks; IntraFi inches higher with general market; WHP Global launches, sets talk

By Sara Rosenberg

New York, Jan. 9 – 2U Inc. saw its term loan B free up for trading during Monday’s market hours, with levels quoted above its original issue discount, IntraFi Network LLC’s (Nexus Buyer LLC) first-lien term loan B was higher as the company launched an amendment, but the move may have been more market related as the secondary in general was stronger, and Nuvei Corp.’s term loan held steady following news that the company is acquiring Paya Holdings Inc.

Meanwhile, in the primary market, WHP Global (WH Borrower LLC) came to market in the morning with a first-lien term loan B and is looking for a quick turnaround as commitments are due midweek, and RelaDyne Inc. and Ciena Corp. joined this week’s new issue calendar.

2U hits secondary

2U’s $380 million term loan B due Dec. 28, 2026 broke for trading on Monday, with levels quoted at 95¾ bid, 97¾ offered, according to a trader.

Pricing on the term loan B is SOFR plus 650 basis points with a 0.75% floor and it was sold at an original issue discount of 95. The debt has 0 bps CSA and 101 soft call protection for six months.

Morgan Stanley Senior Funding Inc. and Goldman Sachs Bank USA are leading the deal that will be used to amend and extend an existing term loan B due Dec. 28, 2024.

In connection with this transaction, a portion of the existing $567 million term loan B is being paid down with proceeds from the issuance of $147 million of 4.5% senior unsecured convertible notes due 2030 and cash on hand.

The company is also getting a $40 million senior secured first-lien revolver due June 28, 2026 priced at SOFR plus 550 bps.

Closing is expected on Wednesday.

2U is a Lanham, Md.-based educational technology company.

IntraFi first-lien gains

IntraFi’s first-lien term loan B moved up by about a half a point on Monday to 96¾ bid, 97¾ offered, a trader said, adding that the strengthening was probably more a function of the market in general being up by a quarter of a point to a point, depending on the name, than the launch of an amendment proposal. Another trader put the general market up a quarter of a point to a half a point.

The company’s second-lien term loan was basically unchanged at 92½ bid, 93½ offered, the trader added.

IntraFi is seeking an amendment to include funds managed by Warburg Pincus LLC and its co-investors as a permitted holder.

The proposed technical amendment would augment the company’s strategic flexibility by facilitating potential further changes in the ownership structure to support growth, another source remarked.

Morgan Stanley Senior Funding Inc. is the agent on the term loan B and is leading the amendment.

Responses are due at 5 p.m. ET on Thursday and lenders are being offered a 10 bps consent fee.

IntraFi is an Arlington, Va.-based financial technology solutions provider offering deposit placement and funding services to financial institutions.

Nuvei steady

Nuvei’s term loan was quoted at 99 bid on Monday, in line with Friday’s levels, after the company announced in the morning plans to purchase Paya Holdings for $9.75 per share for total consideration of about $1.3 billion, a trader said.

Funds for the transaction will come from a new $600 million senior secured first-lien reducing revolving credit facility that is expected to be coterminous with the existing term loan, an existing credit facility and cash on hand.

Bank of Montreal and Royal Bank of Canada provided the financing commitment.

Closing is targeted for this quarter, subject to the tender of a majority of shares, the expiration or termination of the antitrust waiting period and other customary conditions.

Net leverage to consolidated adjusted EBITDA is expected to be less than 3x upon closing.

Nuvei is a Montreal-based payment technology company. Paya is an Atlanta-based provider of integrated payment and commerce solutions.

WHP holds call

Over in the primary market, WHP Global surfaced in the morning with plans to hold a lender call at 11 a.m. ET to launch a non-fungible $150 million covenant-lite first-lien term loan B (B2/B) due Feb. 15, 2027 talked at SOFR plus 550 bps with a 0.5% floor and an original issue discount of 96, according to a market source.

The term loan has call protection of 105 for life that is required on all mandatory and optional prepayments and 0 bps CSA, the source continued.

Commitments are due at noon ET on Wednesday.

Morgan Stanley Senior Funding Inc. is leading the deal.

The loan will be used to help fund the $235 million acquisition of 60% of the Express intellectual property joint venture, which is intended to scale the Express apparel brand through new domestic category licensing and international expansion opportunities. Express Inc., a fashion apparel retailer, will own 40% of the joint venture.

Closing is expected in Express’ fourth fiscal quarter of 2022, subject to lender consent, regulatory approvals and customary conditions.

WHP is a New York-based brand management firm.

RelaDyne readies deal

RelaDyne set a lender call for 11 a.m. ET on Tuesday to launch a non-fungible $200 million incremental first-lien term loan B, a market source remarked.

RBC Capital Markets, BMO Capital Markets, KeyBanc Capital Markets, Macquarie Capital (USA) Inc., Fifth Third and others to be named later are leading the deal that will be used to fund the acquisitions of Allied Oil, a distributor of lubricants, diesel exhaust fluid, and industrial services, and Grupo Lucalza, a distributor of lubricants, fuel, and related automotive supplies.

RelaDyne is a Cincinnati-based provider of lubricant and fuel sales & distribution and equipment reliability services to the industrial, commercial, and automotive industries.

Ciena on deck

Ciena will hold a lender call at 10:30 a.m. ET on Tuesday to launch a $400 million seven-year term loan B, according to a market source.

The term loan has 101 soft call protection for six months.

Commitments are due at noon ET on Friday, the source added.

BofA Securities Inc., JPMorgan Chase Bank, Goldman Sachs Bank USA, Wells Fargo Securities LLC and others to be named are leading the deal that will be used to support the acquisitions of Tibit Communications Inc., a Petaluma, Calif.-based provider of open, microplug OLT technology that enables rapid PON deployment, and 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.

Ciena will acquire the remaining shares of Tibit that it does not already own in a transaction valued at about $210 million, and the transaction is expected to close during Ciena’s fiscal first quarter 2023, subject to customary closing conditions. The Benu acquisition closed during Ciena’s fiscal first quarter 2023.

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

Fund flows

In other news, actively managed loan fund flows on Friday were negative $120 million and loan ETFs were positive $58 million, market sources said.

Actively managed high-yield fund flows on Friday were negative $194 million and high-yield ETFs were positive $1.48 billion. Inflows for the high-yield ETFs surged on Friday alongside a collapse in rates, sources added.

Outflows in 2022 for loan funds totaled $12.7 billion.

Loan indices rise

IHS Markit’s iBoxx loan indices were stronger on Friday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.26% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.35%.

Month to date, the MiLLi is up 0.65% and the LLLi is up 0.87%.

Average secondary market bids in the U.S. on Friday were 92.05, up 0.09% from the previous day and up 0.17% year to date.

According to the IHS Markit data, some of the top advancers on Friday were Mitel Networks’ November 2018 covenant-lite fourth out no roll up term loan at 26.54, up from 23, Tradesmen/Tribe Buyer’s February 2017 term loan at 65, up from 60.92, and Air Methods’ April 2017 covenant-lite term loan B at 57, up from 55.60.

Some top decliners on Friday were EyeCare Partners’ February 2020 covenant-lite term loan B at 80, down from 84.50, National Coinmach/CSC ServiceWorks/Air-Serv’s March 2021 covenant-lite term loan at 79.67, down from 83.71, and Fox US Bidco/Robertshaw’s February 2018 covenant-lite term loan B at 68.25, down from 69.75.

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