CLO Market Round-Up: Continued Acquisition Approvals; Chesapeake Energy CEO Steps Down

In Trepp's weekly CLO market round-up, we recap daily TreppWire stories that highlighted the latest headlines impacting the leveraged loan and corporate CLO markets. Last week, Trepp highlighted company acquisitions, company responses to bankruptcy, refinancings, and more...

If you are interested in seeing the coverage of the CLO headlines in your inbox every morning, click here. Read below for the overview and see how these developments might impact leveraged loan prices.

Here, see a preview of the loans that faced the largest movement in prices last week. Find Trepp's full list, along with the managers who hold the largest exposure to each loan in the TreppCLO product.

Shareholders of CoreLogic Approve Acquisition

CoreLogic announced that its shareholders have voted to approve the Company’s acquisition by funds managed by Stone Point Capital and Insight Partners for $80 per share in cash. The shares of the firm were trading in the high-$70s since March 2021.

The company is represented in the CLO Universe with a $3.2 billion Corelogic - Term Loan (4/21) (L+350; due 2028). The term loan was added to the CLO market in April this year and has been quoted at a notch below par by IHS Markit.

Chesapeake Energy CEO Steps Down Following Bankruptcy Exit

Chesapeake Energy announced that CEO Doug Lawler will be leaving this week, two months after the company emerged from bankruptcy. After filing for bankruptcy in June 2020, the company went through a large re-organization and later emerged from proceedings in February after working through issues with unsecured creditors. The natural gas producer dismissed 15% of its workforce and raise $1 billion in new debt to complete its bankruptcy. Additionally, the company will now have $100 million in interest payments annually, in comparison to $650 million in 2019.

Chesapeake is represented in the CLO Universe with the $1.5 billion Chesapeake Energy Corporation – Term Loan (L+800; due 2024) and the $221 million Chesapeake Energy Corporation – Term Loan B (L+425; due 2025). The large Term Loan was sold heavily during summer 2020 in the high $30s range. In the months following, the credit's trading activity was sparse as the price climbed slightly, but was sold in December in the low $70s range. After that, its price continued to climb and IHS Markit quoted the facility at above par in April. The second facility was originated in early April and was initially purchased in the high $90s range. It was priced at par by IHS Markit recently.

RadNet Refinances First Lien Term Loan and Senior Revolving Credit Facility

Diagnostic imaging servicers RadNet, Inc. announced that the firm has successfully refinanced its $725 million senior secured first-lien term loan and $195 million senior secured revolving credit facility under the Second Amended and Restated Credit Agreement. The initial rate margin on the facilities has been reduced to 3.25% down from 3.75% and the LIBOR floor applicable has been reduced to 0.75% from 1.00%. Additionally, the maturity date for the term loans has been extended to April 2028 and April 2026, respectively. The refinancing ultimately added approximately $107 million to RadNet's balance sheet.

RadNet is represented in the CLO Universe with the $637 million RadNet Management – Term Loan B 2017 (L+250; due 2023) and the $118 million RadNet Management Revolver (L+375; due June 2021). The Term Loan B was held by over 140 CLO vehicles in March, approximately 13% of all US deals in Trepp's CLO database.

The Term Loan B has been heavily traded over the past year, with trades being priced in the low $90s range from April – July 2020. After July, the facility was almost exclusively sold through July at a price of around par. In 2021, the facility has seen a handful of trades at slightly above par, where IHS Markit quoted its price this week. The company’s Revolver was purchased in the mid-90s range in March and was quoted by IHS Markit last week at slightly below par.

Zywave Acquires Enquiron, Fifth Acquisition in Two Years

Insurance technology provider Zywave announced that the firm acquired Enquiron for an undisclosed price. Zywave’s acquisition of the Boston risk management and consulting business marks the fifth time in the last two years the company has expanded through acquisition. It had previously purchased two companies in November 2020. Zywave plans on partnering Enquiron's “modern user experience” with its product cloud portfolio.

Zywave is represented in the CLO Universe via the $453 million Zywave – Term Loan B(11/20) (L+450; due 2027) and the $147 million Zywave – Second Lien Term Loan (L+775; due 2028). Both the Term Loan B (offered November 2020) and the Second Lien Term Loan (offered Feb 2021) were securitized in the last six months.

The larger term loan saw a handful of trades at slightly below-par through the end of 2020. In 2021, it has been both purchased, and more recently sold, at slightly above par, where IHS Markit quoted its price this week. The second-lien term loan was initially purchased in the high 90s range and its price consistently remained in that range over the past two months. IHS Markit quoted the facility's price in the mid-to-high-90s recently.

AppLovin Acquires Adjust for $1 Billion

Mobile ad platform and games publisher AppLovin completed its $1 billion acquisition of Berlin-based measurement and marketing app, Adjust. The move comes as AppLovin looks to capitalize on Adjust’s SaaS mobile marketing solutions and innovative software to help grow its already large app platform. The platform currently services brands such as Tencent, Rakuten, and Soundcloud. Despite the merger, Adjust will keep its brand and culture as it continues to operate as a distinct company. 

AppLovin is represented in the CLO universe with the $1.79 billion Applovin Corporation – Term Loan B (L+350; due 2025). The term loan was held by over 280 CLO vehicles in March, approximately 28% of all US deals in the Trepp CLO database. 

The facility has been heavily traded since April 2020 in the high $90s range. After seeing continuous activity into 2021, the facility was heavily purchased again in early February 2021 at par. The facility continued to generate trading activity this year and was most recently sold at a touch below par. IHS Markit priced the term loan at slightly above par last week. 

General Pricing Data

CLO market issuance declined last week with 30 deals priced, down from 23 deals the week prior. There were 17 new, seven refi, and six reset deals. Eight deals were sourced from the EU market while the rest were sourced in the US market.

The best new execution in the US market was by $409.4 million Cedar Funding XIV, which featured a AAA class at L+110. The deal is managed by Aegon and arranged by JP Morgan.

The best new execution in the EU market was by $408.0 million Carlyle Euro CLO 2021-1, which featured a AAA class at E+81. The deal is managed by Carlyle and arranged by Goldman Sachs.Request a Free Trial of TreppCLO

The information provided is based on information generally available to the public from sources believed to be reliable.

Originally published in TreppWire, which is distributed every morning as a client-only email newsletter. TreppWire enables readers to stay up-to-date on market activity while providing a competitive advantage over others. TreppWire leverages Trepp’s market expertise and proprietary data sets to provide daily market commentary, trend analysis, research, and breaking news to its clients


CLO Market Round-Up: Continued Acquisition Approvals; Chesapeake Energy CEO Steps Down