CLO Market Round-Up: United Airlines Debt Rated; Aecom's Early Settlement of Cash Offer

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, we covered big firms' loan rating downgrades, tender offers, loan amendments, secured debt ratings, acquisitions, 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.

United Airlines Senior Secured Debt Issuance Rated 'BB'/'RR2' by Fitch

Fitch assigned a rating of ‘BB’/’RR2’ to United Airlines' proposed senior secured debt issuance, which is set to total up to $10.75 billion. $1.75 billion is set to be a secured revolver while the other $9 billion will be a mix of term loans and bonds. The airline company will use proceeds from the new issuance to refinance United’s existing term loan and replace its loan availability under the CARES act.

United is represented in the CLO Universe with the $3.0 billion United Continental Holdings – Term Loan B (L+525; due 2027) and the $1.49 billion United Airlines – United Airlines T/L B (05/18) (L+175; due 2024). The two facilities were held by over 410 and 265 CLO vehicles in February – approximately 40% and 26% of all US deals in Trepp's CLO database, respectively.

Since we last wrote about United’s facilities in December, they have both been incredibly active. The larger facility was heavily sold from January to March at above $105, with its most recently sell trade being priced at $106. IHS Markit quoted the facility's price in that range this week. The smaller facility has also been actively traded in 2021, with both “buy” and “sell” transactions taking place at slightly below par. It was priced at slightly above par by IHS Markit last week.

Aecom Reaches Early Tender Offer Settlement; Amends Facilities of Secured Term Loan

Infrastructure consulting firm Aecom announced via a tender offer to purchase $700 million of its outstanding 5.857% notes (due 2024), the company has purchased $607 million in notes that were validly tendered. The company also announced that it has executed an amendment to its existing senior secured credit facilities in order to obtain a $700 million incremental senior secured term loan B credit facility. The total amount purchased by Aecom (the “purchase price”) totaled $696 million, plus accrued and unpaid interest. The purchased amount was funded by using the proceeds from the Company’s Term B Facility and cash on hand.

Aecom is represented in the CLO universe by the $335 million Aecom Technology Corporation – Term Loan (L+875; due 2028). The facility was originated in February 2021 and was purchased in the middle of the month at slightly below par. The facility was held by over 20 CLO vehicles in March and its price was quoted at slightly above par by IHS Markit last week.

Harvey Gulf Receives Moody's Ratings Downgrades

Moody’s downgraded marine transportation company HGIM (Harvey Gulf International Marine) Corporation's Corporate Family Rating (CFR) to 'Caa3' from 'Caa1,' its Probability of Default Rating (PDR) to 'Caa3-PD' from 'Caa1-PD' and its term loan to 'Caa3' from 'Caa1.' The company’s outlook also remains negative. Moody notes that the ratings rationale comes from weak offshore fundamentals and deteriorating cash flow prospects.

HGIM is represented in the CLO universe with the Harvey Gulf International Marine – HGIM CORP Exit Term Loan (L+600; due 2023). The term loan was held by over 35 CLO vehicles in February – approximately 4% of all US deals in the Trepp CLO database. The facility has seen little activity since the beginning of 2020, with only a handful of sell trades taking place in the mid $70s range in February. The price dropped midway through 2020 before beginning to recover in 2021. IHS Markit quoted the price in the mid $60s range last week.

Avantor Acquires Robotics Company Ritter for $1.06 Billion

Life science, advanced technologies, and applied materials company Avantor, Inc. announced a $1.06 billion acquisition of robotics company Ritter. Expected to close in Q3 of 2021, the acquisition will allow Avantor to turn Ritter’s liquid handling and robotic consumables into its own lab automated workflow, which adds to Avantor’s capabilities for drug and life science resources.

Avantor is represented in the CLO Universe with the $1.95 billion Avantor – USD Term Loan B3 (L+225; due 2024), the $1.175 Billion Avantor Funding Term Loan B (L+225; due 2027), and the €1 billion Avantor – Term Loan EUR  (E+250; due 2024). In February, the two US-denominated term loans were held by over 135 and 150 CLO vehicles, respectively, while the European credit was held by over 80 Euro CLO vehicles, according to Trepp's CLO database.

Since we last wrote about Avantor, the larger US facility and the Euro facility have both seen a large amount of continuous trading activity. Both facilities have experienced a high number of buy and sell trades since October that was priced at slightly above and below par. Both were being priced at slightly above par by IHS Markit recently.

The smaller US facility was originated in November 2020 and after initially being heavily purchased, has seen mostly sell trades priced at par or a touch below. Its most recent transaction took place in March when the facility was sold at slightly above par. IHS Markit quoted its price in the same range recently.

Consolidated Communications Reprices Term Loan

Broadband provider Consolidated Communications announced it has completed the repricing of its existing term loan (due 2027). The company entered into a second amendment to refinance $999.9 million of its Term Loan B. The repricing was finalized in conjunction with the company's recent $400 million notes offering. The proceeds from the notes were used to repay a portion of the term loan.

Consolidated Communications is represented in the CLO universe with the $1.0 billion Consolidated Communications Term Loan B (10/20) (L+475; due 2027) and the recently originated $1.0 billion Consolidated Communications – TLB (L+350; due 2027). The term loan was held by over 285 and CLO Vehicles in February – approximately 28% of all US deals in the Trepp CLO Database.

Since we last wrote about Consolidated Communications, its October-originated facility has seen a large number of sell trades over the past two months, priced at above par. Its latest transaction was a buy trade in March, priced in the same range. The newer term loan was originated in March of this year and was heavily bought at par. Both facilities were priced at above par by IHS Markit last week.

General Pricing Data

Issuance in the CLO market decreased as 15 deals priced, down from 20 the week prior. There were three new, six refi, five reset, and one re-issued deal. 11 deals were sourced in the US market while four were sourced from the EU.

The best new execution in the US market was the $409.50 million Tallman Park, which featured a AAA class at L+106. The deal is managed by Blackstone and was arranged by Barclays.

The best new execution in the EU market was the €548 million Madison Park Euro Funding XVI, which featured a AAA class at E+79. The deal is managed by CSAM and was arranged by Citi. 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: United Airlines Debt Rated; Aecom's Early Settlement of Cash Offer