CLO Market Round-Up: VICI Properties and Topgolf Acquisitions, Both See Ratings Upgrades

In Trepp's weekly CLO market round-up, we recap daily TreppWire stories that highlighted these relevant articles. Last week, we covered large acquisitions, ratings affirmations and upgrades, public valuations, 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.

VICI Properties Acquires Venetian Resort for $4.0 Billion; Sees Ratings Upgrade

Real Estate Investment Trust VICI Properties reportedly purchased all of the real estate assets associated with the Venetian Resort Las Vegas from Las Vegas Sands Corp for $4.0 billion. The purchase includes the Sand Expo and Convention Center, which makes up the rest of the Venetian real estate. The purchase comes as Fitch Ratings upgraded the company’s outlook from 'negative' to 'stable' and affirmed its ‘Long-Term Issuer Default Ratings (IDRs) at ‘BB.’

VICI Properties is represented in the CLO universe with the $2.2 billion VICI Properties – VICI Properties 1 T/L B (L+175; due 2024).The Term Loan was held by over 345 CLO Vehicles in January – or approximately 32% of all US deals in Trepp's CLO database. The facility has been heavily traded since securitization - even during the “pandemic drop” in March, it continued to be actively purchased. Since April, almost all of the term loan transactions that have taken place were priced in the low-mid $90s range. In November, as the price creeped up to slightly below par, the facility was sold more frequently but was still heavily purchased by investors. In the past month, the majority of the activity has been “sell” trades priced at slightly below par. IHS Markit quoted the price in that range recently.

Topgolf Completes Acquisition, Sees Ratings Upgrades

When we last wrote about Topgolf Entertainment Group in October, it was to mark its acquisition by Callaway Golf in an all-stock deal that valued the sports entertainment company at nearly $2 billion. With the acquisition completed recently, Moody’s upgraded Topgolf’s Corporate Family Rating to 'B3' from 'Caa1,' its Probability of Default Rating to 'Caa1-PD' from 'Caa2-PD,' and its first lien credit facility rating to 'B3' from 'Caa1.' The outlook for the company remains stable. The ratings stem from Callaway’s implied support for their new acquisition, despite the fact they have neglected to guarantee Topgolf’s outstanding debt.

Topgolf is represented in the CLO universe with the $350 million Topgolf International – Topgolf International T/L 02/19 (L+625; due 2026). In January, the facility was held by over 55 CLO vehicles, approximately 6% of all US deals in the Trepp CLO database.

Since we last reported on the facility, it has seen its price continue to rise amongst a handful of sell trades. It was last sold in late January at above par – its price remains at the level, according to IHS Markit.

Terex Corporation Receives Ratings Affirmations And Upgrades

Moody's announced a series of rating affirmations and upgrades for the lifting and material-handling company Terex Corporation. It has affirmed the company’s corporate family rating (CFR) at 'B1' and its probability of default rating at 'B1-PD' and upgraded its senior unsecured rating to 'B2' from 'B3.' They also assigned the company’s new bank credit facility a 'Ba2' senior secured rating while upgrading Its outlook rating from 'negative' to 'stable.' The change reflects the view that Terex will continue to deleverage as revenue and profitability rebounds for the industrial manufacturer. The company is expected to have over $1 billion in liquidity through aggregate cash and revolver ability.

The lifting and material processing company is represented in the CLO universe with the $397 million Terex Corporation – Incremental U.S. Term Loan (L+200; due 2024) and the $200 million Terex Corporation – Term Loan B1 (L+275;due 2024). In January, the two term loans were held by over 75 and 105 CLO vehicles, respectively – or approximately 8% and 10% of all US deals in the Trepp CLO database.

The first facility has seen notable trading activity in recent months and was heavily purchased in December in the high $90s. Since then, the credit's price has climbed, and the facility has seen a small concentration of sell trades at slightly below par. The B1 Term Loan has only experienced a handful of trades in the past year, with its most recent sell trade taking place in February at par. Both term loans were priced at above par last week by IHS Markit.

KORE Going Public Through SPAC; Valued at $1 Billion

KORE Wireless, a provider of Internet of Things (IoT) solutions and connectivity-as-a-service (Caas), announced that it has entered into an agreement with the SPAC, Cerberus Telecom Acquisition Corp. (CTAC) that will bring the company public at a valuation of $1 billion. The deal is expected to close in mid-2021 and will result in the company being listed on the NYSE under the ticker “KORE.”

KORE reports an annual revenue of $219 million and has set a target to raise that number to $400 million by 2025 and then to $1 billion shortly thereafter. Cerberus Telecom was formed in October of last year and submitted an SEC filing this past Monday to raise $500 million via IPO.

KORE is represented in the CLO universe with the $315 million KORE Wireless Group – Term Loan (10/18) (L+550; due 2024). In January, the company was held by over 10 CLO vehicles or approximately 1% of all US deals in the Trepp CLO database.

The facility has been lightly traded since origination, and its price has consistently hovered in the mid to high $90s range. The credit's price dropped notably last March at the start of the pandemic, but later made a sharp recovery and then continued to climb back up to handles of $90s. The facility was last purchased in January at slightly below par. IHS Markit quoted its price at slightly above par last week.

Moody's Rates Wilsonart's Amended Credit Facility

Recently, Moody’s assigned a 'B2' rating to the amended $1.2 billion first-lien senior secured term loan and a 'B2' rating to the amended $175 million senior secured revolving credit facility for Wilsonart LLC. Moody's stated that the transaction will be "leverage neutral while improving the company's debt maturity profile, which will be pushed out three years, and lower its interest cost."

Wilsonart is a manufacturer and distributor of decorative engineered surfaces for commercial and residential markets based in Austin, TX.

Wilsonart is represented in the CLO universe by the $1.2 billion Wilsonart - Wilsonart Term Loan B (8/17) (L+325; due 2023). The actively traded facility was held by over 250 CLO vehicles in January - or approximately 25% of all US deals in Trepp's CLO database.

The term loan has been heavily traded since issuance. Trading for the credit has been active after its price recovered following a pandemic-induced price drop. IHS Markit quoted the price at slightly above par last week. 

General Pricing Data

Issuance in the CLO market increased slightly last week as 30 deals priced. There were ten new, eight refi, eleven reset, and one re-issued deal. 21 deals were sourced from the US market while the rest were sourced from the EU.

The best new execution in the US market was the $512.17 million Rockford Tower 2017-1, which featured a AAA class at L+110. The deal is managed by Rockford Tower and was arranged by Citi.

The best new execution in the EU market was the €408.40 million Barings Euro CLO 2021-1, which featured a AAA class at E+80. The deal is managed by Barings and was arranged by Barclays.
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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: VICI Properties and Topgolf Acquisitions, Both See Ratings Upgrades