Mitratech changes revolver size, moves term loan deadline; Triton steady after downgrade

By Sara Rosenberg

New York, March 1 – In the primary market on Tuesday, Mitratech upsized its incremental revolving credit facility, accelerated the commitment deadline for its incremental first-lien term loan and added a joint lead arranger to the transaction.

And, over in the secondary market, Triton Water Holdings Inc.’s first-lien term loan held in the low-90s context, basically shrugging off ratings downgrades by Moody’s Investors Service as the market in general was stronger.

Mitratech updated

Mitratech raised its incremental revolver to $38.5 million from $30 million, for a pro forma total size of $78.5 million, according to a market source.

In addition, the company moved up the commitment deadline for its non-fungible $225 million incremental first-lien term loan due May 2028 (B2/B-) to noon ET on Wednesday from 5 p.m. ET on Wednesday, the source continued.

Talk on the term loan remained at SOFR+CSA plus 425 basis points with a 0.75% floor, an original issue discount of 95 to 96 and 101 soft call protection for six months. CSA is ARCC standard of 11.448 bps one-month rate, 26.161 bps three-month rate and 42.826 bps six-month rate.

Golub Capital is the left lead arranger on the deal, and UBS Investment Bank has joined on as a joint lead arranger, the source added.

The term loan will be used to fund two acquisitions.

Ontario Teachers’ Pension Plan is the majority owner of Mitratech, and Hg Capital is a minority owner.

Mitratech is an Austin, Tex.-based provider of legal matter management, compliance and operational risk software solutions for corporate in-house legal departments and law firms.

Triton relatively flat

Meanwhile, in trading, Triton Water’s first-lien term loan was quoted at 90¼ bid, 91¼ offered on Tuesday following ratings downgrades by Moody’s Investors Service, basically flat from Monday’s slightly wider levels of 90 bid, 91½ offered, a trader remarked.

Moody’s cut Triton’s corporate family rating to B3 from B2, first-lien term loan rating to B2 from B1 and unsecured notes rating to Caa2 from Caa1. The rating outlook is stable.

The downgrades reflect the company’s weak free cash flow and high debt/EBITDA leverage of 8.6x (on a Moody’s adjusted basis) as of Sept. 30, 2022, the rating release explained.

Moody’s went on to say that Triton’s liquidity is adequate, supported by full access to an undrawn $350 million ABL revolving credit facility, which has $322 million availability excluding $21 million of letters of credit outstanding, expiring in 2026, and a $261 million cash balance as of Sept. 30, 2022.

Triton is a Stamford, Conn.-based provider of bottled water.

Secondary better

Overall, the secondary market was stronger on Tuesday with some improved trading volume, according to a trader.

The trader had the general loan market up by about an eighth to a quarter of a point on the day.

“Better trading environment today. Equities green today so gave people some optimism,” the trader added.

Nasdaq closed up 184.57 points, or 1.58%, on the day, Dow Jones Industrial Average closed up 316.02 points, or 0.98%, on the day, and S&P 500 closed up 51.30 points, or 1.3%, on the day.

Fund flows

In other news, actively managed loan fund flows on Monday were negative $205 million and loan ETFs were negative $140 million, market sources said.

Outflows for loan funds year-to-date total $6.9 billion, sources added.

Loan indices retreat

IHS Markit’s iBoxx loan indices were lower on Monday, with the Leveraged Loan indexes (MiLLi) closing out the day down 0.12% and the Liquid Leveraged Loan indices (LLLi) closing out the day down 0.16%.

Month to date, the MiLLi is down 1.13% and year to date it is up 2.03%, and the LLLi is down 1.30% month to date and up 1.58% year to date.

Average secondary market bids in the United States on Monday were 91.1, down 0.15% from the previous day and down 0.86% year to date.

According to the IHS Markit data, some of the top advancers on Monday were City Brewing’s April 2021 covenant-lite term loan at 41.13, up from 40.43, Tradesmen/Tribe Buyer’s February 2017 term loan at 66.73, up from 65.81, and Veritas’ March 2021 U.S. covenant-lite term loan B at 75.7, up from 74.67.

Some top decliners on Monday were United Road Services’ September 2017 covenant-lite term loan B at 28.55, down from 29.75, Instant Brands’ April 2021 covenant-lite term loan at 39.17, down from 40, and Dell Software’s (Quest/One Identity) February 2022 covenant-lite term loan at 79.45, down from 81.13.

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