Citco sets talk with launch; U.S. Silica tenders for term B; Citrix, Parts Authority weaken

By Sara Rosenberg

New York, Oct. 12 – Citco Group launched with a lender call on Wednesday a term loan A and term loan B transaction that would take out its existing term loan B, and U.S. Silica Holdings Inc. emerged with a tender offer for a portion of its outstanding term loan B.

In more happenings, the secondary market was unchanged to down a half a point on the day, with names like Citrix Systems Inc. (Tibco Software Inc.) and Parts Authority (PAI Holdco Inc.) examples of names that dropped.

Citco holds call

Citco Group held a lender call at 1 p.m. ET on Wednesday to launch $795 million of term loans, split between a $275 million five-year term loan A and a $520 million 5½-year term loan B, a market source remarked.

Talk on the term loan A is SOFR plus 275 basis points with a 0.5% floor and an original issue discount of 98.5, and talk on the term loan B is SOFR plus 375 bps with a 0.5% floor, a discount of 97 and 101 soft call protection for one year, the source continued.

Commitments are due at 5 p.m. ET on Oct. 20.

Stone Point Capital Markets, UBS Investment Bank, JPMorgan Chase Bank, Citizens, U.S. Bank and Truist are leading the deal. UBS is the administrative agent.

The new debt will be used to refinance an existing term loan B due September 2023 priced at Libor plus 250 bps with a 0% Libor floor.

Citco is a provider of financial services to hedge funds, private equity and real estate firms, institutional banks, companies and high net worth individuals.

U.S. Silica tender offer

U.S. Silica launched a tender offer for up to $50 million of its $1.112 billion covenant-lite term loan B due May 2025 at a price of 96.25, according to a market source.

The tender offer expires at 5 p.m. ET on Friday and will be funded with cash on hand, the source added.

BNP Paribas Securities Corp. is leading the deal.

U.S. Silica is a Katy, Tex.-based industrial minerals and logistics company.

Citrix, Parts Authority slide

Moving to the secondary market, generally speaking names were unchanged to down a half a point, with Citrix and Parts Authority illustrations of those that moved lower.

Citrix, a Fort Lauderdale, Fla.-based provider of secure, unified digital workspace technology, saw its term loan B quoted at 89¼ bid, 90 offered, down from 89¾ bid, 90½ offered, a market source said.

And, Parts Authority, a Lake Success, N.Y.-based automotive aftermarket replacement parts distribution platform, saw its term loan quoted at 95 bid, 96 offered, down from 95½ bid, 96½ offered in the prior session, the source added.

On Tuesday, Standard & Poor’s downgraded Parts Authority’s term loan and corporate ratings to B- from B because the rating agency no longer expects the company to be able to reduce leverage to below 6x over the next 12-24 months as a result of its ongoing acquisitive strategy and the current elevated cost environment.

S&P explained that Parts Authority has faced inflationary cost pressures, particularly within payroll and fuel costs, which have led to S&P Global Ratings’ adjusted EBITDA margin contracting more than 350 bps in the second quarter of 2022 compared to the same quarter in the prior year. The margin pressure, coupled with around $300 million of incremental debt including revolver borrowings, led to more than 9x LTM leverage.

Loan indices soften

In other news, IHS Markit’s iBoxx loan indices declined on Tuesday, with the Leveraged Loan indexes (MiLLi) closing out the day down 0.06% and the Liquid Leveraged Loan indices (LLLi) closing out the day down 0.09%.

Month to date, the MiLLi is up 0.68% and year to date its down 2.97%. The LLLi is up 1.01% month to date and down 3.84% year to date.

Average secondary market bids in the U.S. on Tuesday were 92.45, down 0.06% from the previous day and down 4.54% year to date.

According to the IHS Markit data, some of the top advancers on Tuesday were OSG Billing’s March 2018 term loan at par, up from 70.43, Weber-Stephen’s October 2020 covenant-lite term loan B at 83.38, up from 81.19, and Dell Software’s (Quest/One Identity) February 2022 covenant-lite term loan at 74.08, up from 72.31.

Some top decliners on Tuesday were Springs Window Fashions’ October 2021 covenant-lite term loan at 77.39, down from 80, Revlon’s November 2020 additional covenant-lite term loan B2 at 55.58, down from 57.42, and Weight Watchers’ April 2021 covenant-lite term loan B at 64.63, down from 66.60.

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