Underwriters moved ahead with a modest slate of new issues in loans and bonds last week despite continued volatility, particularly early in the week, and markets remained in price discovery a week into the reset caused by Russia’s invasion of Ukraine. The low volume in new issues and negative returns in both asset classes weren’t dreadful, but they were the worst since the March 2020 pandemic lockdown.

Tellingly, motivated issuers needing M&A funding drove nearly all of the week’s business, at least in loans; with spreads still in flux and cash positions short on the Street, it doesn’t appear to be the best time for issuers to consider opportunistic business, though the market is changing by the day. In another factor dissuading opportunistic business, the percentage of loans in the Credit Suisse index bid north of par has cratered, closing out last week at a miniscule 0.6% after standing at 1.7% Feb. 24 and a towering 41.1% for the week ended Jan. 21.

With $6.6 billion of M&A activity, launched loan volume rebounded to $7.4 billion and $6.5 billion on a net basis via 11 transactions, versus the prior week’s lone $650 million new-money deal.

Portfolios in brief: Holds reflect most recent reporting period available

Palmer Square, ARCC, BCRED: Belfor Holdings (B1/B) – Dividend

J.P. Morgan set a 99.026 offer price on the $250 million fungible add-on term loan for Belfor Holdings to back a dividend to owner American Securities. The loan would be fungible with Belfor’s roughly $700 million first-lien term loan due 2026 (L+400, 0% floor). Note the loan includes a 25 bps margin step-down at 3.5x net total leverage. The issuer last tapped the market a year ago with a $155 million add-on that also funded a dividend. Commitments are due by 5 p.m. ET today. Holders of the existing first-lien debt include Palmer Square Capital BDC (nearly $3M), Ares Capital ($6.3M), and BCRED (nearly $5M).

BCRED: Imprivata (B2/B) – M&A

An arranger group led by Goldman Sachs set talk of S+400 with a 0.5% floor and a 98.5 offer price on the $383 million incremental term loan for Imprivata backing its acquisition of SecureLink. The issuer also is placing privately a $300 million second-lien term loan. The incremental first-lien term loan, which includes six months of 101 soft call protection, would be coterminous but not fungible with the issuer’s existing term loan B due December 2027. The current $739 million first-lien term loan spread will back step back up to L+375 with a 0.5% floor, from L+350 pro forma for this transaction. Arrangers on the incremental loan are GS, Golub Capital, UBS and Mizuho. Commitments are due on Tuesday, March 15. Imprivata last tapped the market in early 2020 with a $745 million term loan B due 2027 (L+375, 0.5% floor) that funded a $453 million dividend to owner Thoma Bravo and a $210 million acquisition while refinancing existing debt. BCRED holds $12.9 million of the existing first-lien debt.

Audax, NMFC: Restaurant Technologies (B2/B) – LBO

A Morgan Stanley-led arrange group outlined guidance of S+425 with a 0.5% floor and a 98-98.5 offer price on Restaurant Technologies’ $810 million green term loan B, sources said. The seven-year term loan would include a 25 bps step-down tied to an initial public offering. The CSA is set at 0 bps, and the loan includes six months of 101 soft call protection. As reported, the deal backs ECP’s acquisition of a majority stake in the business from Goldman Sachs Asset Management. The financing includes a $100 million revolver in addition to the $810 million green term loan B. Commitments are due by 5 p.m. ET on Thursday, March 17. GSAM acquired a majority stake in the business from Aurora Capital Partners in 2018 backed by a $400 million first-lien term loan due 2025 (L+325, 0% floor) and a $100 million second-lien loan due 2026 (L+650, 0% floor). Holders of the second-lien debt include Audax Credit BDC Inc. ($500K) and New Mountain Finance ($6.7M).

Investment details provided by Advantage Data.