Renaissance Learning frees to trade; secondary better with favorable financial sector news

By Sara Rosenberg

New York, March 16 – Renaissance Learning Inc. widened the original issue discount on its first-lien term loan and then the debt made its way into the secondary market on Thursday.

In general, the secondary market was a little stronger over the session, helped by a rebound in equities and some calming news in the financial sector.

Meanwhile, in the primary market, Tricor/Vistra (Thevelia (US) LLC) joined this week’s calendar with a multi-currency incremental term loan B.

Renaissance tweaked, breaks

Renaissance Learning changed the original issue discount on its $1.575 billion seven-year first-lien term loan (B2/B-) to 97 from 98, and left pricing at SOFR plus 475 basis points with a 0.5% floor, according to a market source.

As before, the term loan has 101 soft call protection for six months.

On Thursday, the term loan freed to trade, with levels quoted at 97¼ bid, 98 offered, another source added.

Barclays, Madison Capital, Macquarie Capital (USA) Inc., BMO Capital Markets, RBC Capital Markets, Jefferies LLC and Nomura are leading the deal that will be used to refinance the company’s existing 2025 and 2027 first-lien term loans and to pay related fees and expenses.

Renaissance Learning is a Wisconsin Rapids, Wis.-based provider of software solutions for assessment, teaching and learning to K-12 schools and districts.

Secondary gains

The secondary market in general was up by about an eighth to a quarter of a point, depending on the name, as people were responding to a rebound in equities, a market source remarked.

The source explained that “some of the calm from the First Republic rescue package” helped the markets strengthen.

First Republic Bank announced on Thursday that it is receiving uninsured deposits totaling $30 billion from Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist and U.S. Bank to reinforce its liquidity position.

Also, Credit Suisse announced that it is exercising its option to borrow from the Swiss National Bank CHF 50 billion under a covered loan facility as well as a short-term liquidity facility, to pre-emptively strengthen its liquidity and support its core businesses and clients as steps are taken to create a simpler and more focused bank.

On Thursday, the S&P 500 closed up 68.35 points, or 1.76%, NYSE closed up 168.42 points, or 1.15%, and Dow Jones Industrial Average closed up 371.98 points, or 1.17%.

Tricor/Vistra on deck

Moving to the primary market, Tricor/Vistra set a lender call for 10:30 a.m. ET on Friday to launch a $1.66 billion equivalent U.S. and euro incremental senior secured first-lien covenant-lite term loan B (//BB+) due June 2029 that may also include Hong Kong dollar tranches, according to a market source.

Commitments are due on March 28 and allocations are expected on March 29, the source added.

Goldman Sachs is the lead arranger and sole left lead bookrunner on the deal. Barclays, Deutsche Bank Securities Inc., HSBC Securities, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Agricole, Morgan Stanley Senior Funding Inc., MUFG and Nomura are lead arrangers and joint bookrunners.

The term loan will support the merger of Tricor, which was acquired by Baring Private Equity Asia (BPEA) in 2021, and Vistra, which was acquired by BPEA in 2015, and to prepay Vistra’s existing first-lien term loan Bs. Existing Vistra term loan B lenders can vote to register for cashless roll into the incremental term loan.

The maturity of the incremental term loan matches the maturity on Tricor’s existing first-lien term loan B.

Tricor is a Hong Kong-based business expansion specialist. Vistra is a Hong Kong-based fund administrator and corporate service provider.

Fund flows

In other news, actively managed loan fund flows on Wednesday were negative $151 million and loan ETFs were negative $146 million, market sources said.

The tracking estimate for Thursday night’s weekly Lipper numbers for loans are outflows totaling $1.4 billion.

Leveraged loan funds are tracking their largest outflow in 2023 amid a rapid recalibration of Federal Reserve expectations, sources added.

Loan indices fall

IHS Markit’s iBoxx loan indices were weaker on Wednesday, with the Leveraged Loan indexes (MiLLi) closing out the day down 0.52% and the Liquid Leveraged Loan indices (LLLi) closing out the day down 0.75%.

Month to date, the MiLLi is down 0.91% and year to date it is up 2.26%, and the LLLi is down 1.10% month to date and up 1.79% year to date.

Average secondary market bids in the United States on Wednesday were 91.31, down 0.24% from the previous day and down 0.63% year to date.

According to the IHS Markit data, some of the top advancers on Wednesday were Diamond Sports/Sinclair/Regional Sports’ March 2022 first priority term loan at 96.75, up from 93, Trilliant Food’s April 2018 covenant-lite term loan B at 79.83, up from 79, and Isagenix’s June 2018 term loan at 32.33, up from 32.

Some top decliners on Wednesday were Lucky Bucks’ July 2021 covenant-lite term loan at 35.25, down from 37.22, Maverick Gaming’s September 2021 covenant-lite term loan B at 67, down from 70.33, and Edelman Financial’s June 2018 second-lien covenant-lite term loan at 94, down from 96.97.

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