Gulf Finance term loan rises on amendment request news; Juice Plus slips with downgrade

By Sara Rosenberg

New York, Dec. 20 – Gulf Finance LLC’s term loan B was stronger by a few points in trading on Tuesday as the company went out to investors with an amendment proposal that would result in some of the debt being paid down.

Meanwhile, Juice Plus (JP Intermediate LLC) saw its term loan soften in the secondary market following a downgrade by Moody’s Investors Service of its corporate family and senior secured debt ratings.

Gulf Finance gains

Gulf Finance’s senior secured term loan B rose to 90 bid, 92 offered on Tuesday from 85 bid, 87 offered on Monday due to an amendment request, according to a trader.

The trader said that the company is seeking an amendment to allow for an asset sale and would use some of the proceeds from the sale to repay a portion of the outstanding term loan B.

Gulf Finance is a refined products terminaling, storage and logistics business and a distributor of petroleum products.

Juice Plus slides

Juice Plus’ term loan dropped to 70 bid, 72 offered from 72 bid, 74 offered after Moody’s cut the company’s corporate family rating to Caa3 from Caa1 and first-lien senior secured revolving credit facility and term loan ratings to Caa2 from B3, a trader remarked. The rating outlook is negative.

The downgrades reflect Moody’s expectations that the company’s operating performance and operating cash flow will continue to deteriorate amid high distributor churn and inflationary pressures on consumers over the next 12 months.

Meaningful sales declines and earnings resulted in high leverage where the capital structure is becoming unsustainable without a meaningful operational turnaround, Moody’s said in the release, adding that there is elevated potential for a distressed exchange or other debt restructuring.

Moody’s also expects Juice Plus’ liquidity to weaken as the expiration of the revolver is approaching in November 2023 and rising interest rates and lower earnings reduce free cash flow.

The rating release added that Moody’s believes the company’s cash balance may not be sufficient to fund the $22.5 million of required annual term loan amortization, and repayment of the revolver if the facility is not extended, and a violation of the maximum net leverage covenant of 3.75x is very likely over the next 12 months.

Juice Plus is a Collierville, Tenn.-based provider of whole food based nutritional products.

Fund flows

In other news, actively managed loan fund flows on Monday were negative $208 million and loan ETFs were negative $102 million, market sources said.

Loan funds week to date outflows total an estimated $806 million, following outflows in the prior week of $1.18 billion, sources added.

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