Deal flow was sparse in both loans and bonds last week as new-issue yields continued to widen amid the volatility. That reset limited action largely to those issuers with pressing needs for M&A-related funding.

Certainly, last week’s pair of new-issue loans were M&A driven, for $500 million of gross launched volume and $300 million net. However, transactions rolled out at the tail end of the prior week moved ahead, making it modestly busier than the paltry launched volume implies.

Franklin BSP: Skillsoft (B2/B-) –M&A

Barclays and Citi set price talk of S+500 with a 0.75% floor and a 98.625 OID on the $160 million add-on term loan backing Skillsoft’s planned cash-and-stock acquisition of Codecademy. The incremental loan would be fungible with the borrower’s existing term loan due July 2028. The company is seeking to migrate its existing loan to SOFR-based pricing via a negative consent amendment utilizing the early opt-in language. The CSA is the ARRC-recommended construct of approximately 11.4/26.2/42.8/71.5 for one-month, three-month, six-month and 12-month SOFR, respectively. The existing loan is currently priced at L+475 with a 0.75% floor; the margin on the existing paper is being repriced upwards to 500 to match the incremental loan. The current 102 hard call protection through July 16 would remain intact. Citi is administrative agent. Commitments are due by 5 p.m. ET on Thursday, March 24. The transaction, announced in December, is expected to close in April. Codecademy is an online learning platform for technical skills. In addition to the incremental loan, the transaction will be financed with $60 million of cash from the balance sheet and $206 million of new equity to Codecademy shareholders. Pro forma leverage per the credit agreement runs about 4.2x. Skillsoft last tapped the loan market in July for a $480 million term loan that was used to refinance its existing term debt and ABL borrowings following its merger with special purpose acquisition company Churchill Capital Corp. II and acquisition of Global Knowledge. It cleared with a free-and-clear incremental tranche set at $160 million, with a 1x grower. The refinancing leveraged the issuer at 2.8x, all senior, LFI reported at the time. Skillsoft, a corporate digital learning company, trades on the NYSE under the symbol SKIL and has a market capitalization of about $890 million. Franklin BSP Capital LLC holds $628K of the existing first-lien debt, while Franklin BSP Lending Corp. holds nearly $1.5M.