Entain term loan on deck; Twitter buyout may be back on track; secondary gains continue

By Sara Rosenberg

New York, Oct. 4 – In the primary market on Tuesday, Entain Holdings (GVC Finance LLC) emerged with plans to approach investors with a new term loan B this week.

Meanwhile, in other news, an entity wholly owned by Elon Musk disclosed that it intends to complete its acquisition of Twitter Inc., reversing prior plans to try and cancel the acquisition agreement through court proceedings.

Also, the secondary market as a whole was better, possibly on continued increased activity from CLOs following quarter end amortization payments.

Entain readies deal

Entain Holdings set a lender call for 10 a.m. ET on Thursday to launch a $750 million seven-year covenant-lite term loan B (Ba1/BB/BB+), according to a market source.

The term loan has 101 soft call protection for one year.

Commitments are due at noon ET on Oct. 18, the source added.

Deutsche Bank Securities Inc., Lloyds, Mediobanca, NatWest and Santander are the bookrunners on the deal. Wilmington Trust is the administrative agent.

The term loan will be used to fund the acquisition of 75% of the economic rights in SuperSport Group from EMMA Capital for €600 million in cash at completion and a further contingent payment that is expected to be €90 million made to EMMA in early 2023 based on SuperSport’s EBITDA for the financial year ending 2022. EMMA will contribute their 25% stake in SuperSport to Entain at an initial implied valuation of €200 million, with the contingent payment implying an additional €30 million value contributed by EMMA.

Closing is expected in the fourth quarter, subject to regulatory approvals.

Entain is a Douglas, Isle of Man-based sports-betting, gaming and interactive entertainment group. SuperSport is a gaming and sportsbook operator in Croatia.

Twitter buyout update

A letter to Twitter saying that Musk parties intend to proceed to closing the acquisition of Twitter on the terms and subject to the conditions set forth in the merger agreement from April and pending receipt of the proceeds of the contemplated debt financing was filed in an SC 13D/A with the Securities and Exchange Commission on Tuesday.

After announcing the acquisition agreement in April, Musk tried to terminate the deal, claiming Twitter was in material breach of multiple provisions of the agreement, appeared to have made false and misleading representations and was likely to suffer a company material adverse effect.

The parties were expected to face off in the Delaware Chancery Court this month.

In the letter filed Tuesday, Musk says that the completion of the purchase is also subject to the court entering an immediate stay of the action.

Twitter financing

Upon entering into the Twitter acquisition agreement in April, Musk disclosed commitments for $25.5 billion of debt and margin loan financing for the transaction.

The committed financing includes a $500 million five-year senior secured revolver, a $6.5 billion seven-year senior secured covenant-lite term loan, a $3 billion one-year senior secured bridge loan, a $3 billion one-year senior unsecured bridge loan and a $12.5 billion three-year margin term loan.

Morgan Stanley, BofA Securities Inc., Barclays, MUFG, BNP Paribas Securities Corp., Mizuho and Societe Generale are the joint lead arrangers and bookrunners on the credit facilities and bridge loans. Morgan Stanley is the lead arranger on the margin term loan.

Under the terms of the original agreement, Twitter stockholders will receive $54.20 in cash per share. The transaction is valued at about $44 billion.

Other funds for the acquisition will come from a roughly $21 billion equity commitment from Musk.

Twitter is a San Francisco-based free online social networking microblogging service.

Secondary rises

In more happenings, the secondary market saw a “broad market rally” on Tuesday with loans in general up about three quarters of a point to a point and a half, a market source remarked.

For example, Citrix Systems Inc.’s (Tibco Software Inc.) term loan B was quoted at 90¾ bid, 91¾ offered, up from 89¼ bid, 90¼ offered on Monday, the source said.

Pricing on the Citrix U.S. term loan B is SOFR+10 basis points CSA plus 450 bps with a 0.5% floor and it was sold at an original issue discount of 91.

Fort Lauderdale, Fla.-based Citrix is a provider of secure, unified digital workspace technology.

The source explained that “CLOs are probably still ramping up” after receiving amortization payments at the end of the third quarter.

Stocks were also up on Tuesday, with the Dow Jones Industrial Average closing up 825.43 points, or 2.8%, NYSE closing up 463.76 points, or 3.35%, and Nasdaq closing up 360.97 points, or 3.34%.

Loan indices

IHS Markit’s iBoxx loan indices rose on Monday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.03% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.07%.

Month to date, the MiLLi is up 0.03% and year to date its down 3.60%. The LLLi is up 0.07% month to date and down 4.73% year to date.

Average secondary market bids in the U.S. on Monday were 92.39, down 0.10% from the previous day and down 4.61% year to date.

According to the IHS Markit data, some of the top advancers on Monday were Genesis Care’s March 2020 U.S. covenant-lite term loan B at 41, up from 39, Viasat’s March 2022 covenant-lite term loan at 91.83, up from 88.38, and Loyalty Ventures’ November 2021 covenant-lite term loan B at 31, up from 30.

Some top decliners on Monday were Endo Pharmaceuticals’ March 2021 covenant-lite RSA term loan B at 81.82, down from 84.20, Cineworld’s February 2018 U.S. covenant-lite term loan at 41, down from 42.07, and SciQuest/Jaggaer’s August 2019 covenant-lite term loan at 94.92, down from 97.25.

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