Intelsat Jackson term loan bid strengthens; Melissa & Doug tweaks term loan

By Sara Rosenberg

New York, March 30 – Intelsat Jackson Holdings SA’s term loan was bid higher in the secondary on Thursday, after gaining a few points in the prior session with news that parent company Intelsat SA is in talks with SES SA for a potential merger.

And, in the primary market, Melissa & Doug (MND Holdings III Corp.) tweaked pricing on its first-lien term loan to add a PIK coupon step-up based on the company’s corporate rating.

Intelsat bid up

Intelsat Jackson’s term loan was quoted at 98¾ bid, 99 1/8 offered on Wednesday, up on the bid side from 98½ bid on Tuesday, but down on the offer side from 99½ offered as levels tightened up, a market source remarked. On Tuesday, the term loan was quoted at 96¾ bid, 97¾ offered.

The debt has been on the rise since news surfaced that Intelsat is in discussions with SES on a possible combination.

The merger discussions were confirmed by SES in a press release on Wednesday.

Intelsat is a Luxembourg-based satellite telecommunications company. SES is a Luxembourg-based connectivity provider through a network of satellite and ground infrastructure.

Melissa & Doug revised

Melissa & Doug added to its $260 million first-lien term loan due June 2026 a 100 basis points PIK coupon step-up if its corporate rating is Caa1, according to a market source.

Pricing on the term loan remained at SOFR+15 bps CSA plus 550 bps with a 1% floor and an original issue discount of 95, and the term loan still has 101 soft call protection for six months.

Ratings for the company are private.

Commitments continue to be due at noon ET on Friday, the source added.

Credit Suisse Securities (USA) LLC is the left lead on the deal that will be used to extend an existing term loan due June 2024 priced at SOFR+15 bps CSA plus 350 bps with a 1% floor.

The company’s $325 million of credit facilities also include a $65 million revolver.

Melissa & Doug is a Wilton, Conn.-based specialty toy brand with an educational focus.

Fund flows

In other news, actively managed loan fund flows on Wednesday were negative $104 million and loan ETFs were positive $4 million, market sources said.

Early in the day, the tracking estimate for Thursday night’s weekly Lipper numbers for loans was outflows totaling $660 million. Late in the day, the weekly Lipper numbers for loans emerged as outflows of $712 million, sources added.

Loan indices rise

IHS Markit’s iBoxx loan indices were higher on Wednesday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.22% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.3%.

Month to date, the MiLLi is down 0.50% and year to date it is up 2.69%, and the LLLi is down 0.12% month to date and up 2.8% year to date.

Average secondary market bids in the U.S. on Tuesday were 91.24, up 0.1% from the previous day and down 0.7% year to date.

According to the IHS Markit data, some of the top advancers on Wednesday were Telesat Canada’s December 2019 covenant-lite term loan at 51.25, up from 48.70, Equinox Fitness Clubs’ November 2017 term loan B1 at 87.58, up from 84.79, and Zayo’s June 2022 incremental covenant-lite term loan B at 80.89, up from 79.01.

Some top decliners on Wednesday were Vyaire Medical’s April 2018 covenant-lite term loan B at 71, down from 72.33, Weight Watchers’ April 2021 covenant-lite term loan B at 56.88, down from 57.83, and Dodge Data/Dodge Construction’s February 2022 second-lien covenant-lite term loan at 72.33, down from 73.5.

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