Momentive Performance shops term loan B; RelaDyner readies loan; secondary levels retreat

By Sara Rosenberg

New York, March 13 – In the primary market on Monday, Momentive Performance Materials Inc. approached lenders with a new term loan B, and RelaDyne Inc. joined this week’s calendar with a new incremental first-lien term loan B-2.

Meanwhile, the general secondary market moved lower over the course of the day, with higher rated paper dropping down about half a point and lower rated paper weakening by over a point.

Momentive holds call

Momentive Performance Materials emerged in the morning with plans to hold a lender call at 2 p.m. ET on Monday to launch an $850 million five-year term loan B (Ba3/B+) talked at SOFR plus 400 basis points with a 0% floor, an original issue discount of 97.5 to 98 and 101 soft call protection for six months, according to a market source.

Commitments are due at 5 p.m. ET on March 22, the source added.

JPMorgan Chase Bank, BNP Paribas Securities Corp., Truist and Deutsche Bank Securities Inc. are leading the deal that will be used to refinance existing U.S. and euro term loans and for general corporate purposes.

Momentive is a Niskayuna, N.Y.-based silicones and advanced materials company.

RelaDyne on deck

RelaDyne set a lender call for 11 a.m. ET on Tuesday to launch a fungible $350 million incremental first-lien term loan B-2, a market source said.

RBC Capital Markets, BMO Capital Markets, KeyBanc Capital Markets, Macquarie Capital (USA) Inc., U.S. Bank and Fifth Third are leading the deal that will be used to fund the acquisition of Sun Coast Resources, a specialty distribution and logistics provider primarily focused on distributing diesel, lubricants, and providing logistics services to support a diverse customer base across the Texas/Gulf Coast region.

Presently, RelaDyne has a $250 million term loan B-2 due December 2028 priced at SOFR plus 500 bps with a 0.5% floor and a roughly $561 million term loan B due December 2028 priced at SOFR plus 425 bps with a 0.5% floor.

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

Secondary softens

The secondary market in general weakened on Monday “due to greater macro volatility spilling out into the loan market,” one trader remarked.

The trader went on to say that no one name stuck out, but there was a little bit of price discovery taking place.

In general BB paper was down about a half a point, B+ paper was down about three quarters of a point and B- paper was down about a point-plus, the trader added.

Loan indices drop

In other news, IHS Markit’s iBoxx loan indices were lower on Friday, with the Leveraged Loan indexes (MiLLi) closing out the day down 0.16% and the Liquid Leveraged Loan indices (LLLi) closing out the day down 0.27%.

Month to date, the MiLLi is up 0.06% and year to date it is up 3.26%, and the LLLi is up 3.05% year to date.

Average secondary market bids in the U.S. on Friday were 91.76, down 0.11% from the previous day and down 0.14% year to date.

According to the IHS Markit data, some of the top advancers on Friday were Venator’s June 2017 covenant-lite term loan B at 64.75, up from 63.58, Audio Visual Services’ February 2018 second-lien covenant-lite term loan at 89.67, up from 88.43, and SI Group/Addivant’s October 2018 covenant-lite term loan at 86.13, up from 85.

Some top decliners on Friday were Level 3’s November 2019 covenant-lite term loan B at 87.25, down from 90.19, Brand Energy’s June 2017 covenant-lite term loan at 93.13, down from 95, and Avison Young’s January 2019 covenant-lite term loan at 77.25, down from 78.6.

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