Citrix term loan B bounces from down to up in volatile market; Latam sets price talk

By Sara Rosenberg

New York, Sept. 23 – Citrix Systems Inc.’s (Tibco Software Inc.) term loan B started Friday’s trading session heading lower once again but, by late afternoon, levels moved higher to end the day slightly better than the previous close.

Moving to the primary market, Latam Airlines released price talk on its term loan B in connection with its lender call.

Citrix rebounds

Citrix Systems’ $4.05 billion 6.5-year term loan B moved around quite a bit on Friday, starting the day lower from previous levels and then bouncing back to close out higher on the day, according to sources.

One source had the term loan quoted at 89 bid, 90 offered in the morning, before rebounding to 89¾ bid, 90¾ offered by late afternoon. He had the loan closing out Thursday at 89¼ bid, 90¼ offered.

The source explained that it’s a large piece of paper that probably had some more trading activity in it, resulting in the upward movement.

Another trader saw the loan quoted at 89¼ bid, 90 offered early in the day on Friday and then witnessed it rise to 89 7/8 bid, 90 3/8 offered in the afternoon. He had the debt closing out Thursday at 89 5/8 bid, 90 1/8 offered.

“This one is reactive to whoever’s trading it,” the trader added.

On Tuesday night, the loan broke for trading at 91¼ bid, 91¾ offered.

Pricing on the U.S. term loan B is SOFR+10 basis points CSA plus 450 bps with a 0.5% floor and it was sold at an original issue discount of 91. The debt has 101 soft call protection for one year.

Citrix is a Fort Lauderdale, Fla.-based provider of secure, unified digital workspace technology.

Market softens

In general, sources agreed that the secondary loan market was volatile and lower on Friday, but the amount differed amongst people.

One trader said that the general market was down about half a point to a point on some names, and higher beta names were down as much as one and a half points.

A different source remarked that the general market was lower by about a quarter of a point to a half a point on the day, but with not very much trading activity during the session, it was hard to pin down a number,

Latam guidance

Switching to the primary market, Latam Airlines held its lender call on Friday morning and announced price talk on its $750 million five-year term loan B (B2/B+) at SOFR plus 775 bps with a 0.5% floor and an original issue discount of 92 to 93, a market source remarked.

The term loan is non-callable for one year, then at 101 in year two and par thereafter.

Commitments are due on Oct. 3, the source added.

Goldman Sachs Bank USA, JPMorgan Chase Bank, Barclays, BNP Paribas Securities Corp. and Natixis are leading the deal that will be used with $750 million of senior secured notes due 2027 and $750 million of senior secured notes due 2029 to repay existing debtor-in-possession facilities in connection with the company’s emergence from bankruptcy and for general corporate purposes.

Latam Airlines is a Santiago, Chile-based airline.

Fund flows

In more happenings, Thursday’s actively managed loan fund flows were negative $165 million and loan ETFs were negative $142 million, sources said.

Thursday’s high-yield actively managed fund flows were positive $45 million and high-yield ETFs were negative $1.01 billion, sources added.

Loan indices

IHS Markit’s iBoxx loan indices declined on Thursday, with the Leveraged Loan indexes (MiLLi) closing out the day down 0.18% and the Liquid Leveraged Loan indices (LLLi) closing out the day down 0.20%.

Month to date, the MiLLi is down 0.75% and year to date its down 2.2%. The LLLi is down 1% month to date and down 3.39% year to date.

Average secondary market bids in the U.S. on Thursday were 93.35, down 0.07% from the previous day and 3.61% year to date.

According to the IHS Markit data, some of the top advancers on Thursday were IXS’ March 202 covenant-lite term loan B at 81, up from 78.50, Dayco’s May 2017 covenant-lite term loan B at 97.33, up from 96.07, and Instant Brands’ April 2021 covenant-lite term loan at 69.67, up from 69.

Some top decliners on Thursday were Heritage Power’s July 2019 term loan at 34.66, down from 35.98, Diebold’s May 2017 term loan B at 82.20, down from 85.31, and Envision Healthcare’s October 2018 covenant-lite unvoted term loan at 26.67, down from 27.5.

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