Anticimex breaks; Air Canada, Charter, Avantor term loans move around with earnings

By Sara Rosenberg

New York, Oct. 28 – Anticimex Inc. saw its incremental term loan B free to trade during Friday’s market hours, with levels quoted above its original issue discount.

Also, Air Canada’s term loan headed higher in the secondary market after the company announced third quarter numbers that showed an increase in operating revenues from the prior year and the first quarterly operating income since the pandemic began.

Meanwhile, Charter Communications Inc.’s term loan B-1 was a touch softer with its quarterly results, and Avantor Inc.’s term loan B-5 was a little better on the back of its third quarter earnings announcement.

Anticimex frees up

Anticimex’s non-fungible $200 million incremental senior secured covenant-lite term loan B due November 2028 broke for trading on Friday, with levels quoted at 95½ bid, 96½ offered, a trader said.

Pricing on the incremental term loan is SOFR+10 basis points CSA plus 475 bps with a 25 bps step-down at 5x first-lien net leverage and a 0.5% floor. The debt was sold at an original issue discount of 95 and has 101 soft call protection for six months.

Morgan Stanley Senior Funding Inc. is the bookrunner on the deal. Global Loan Agency Services Ltd. is the agent.

The loan will be used to repay revolver borrowings and for general corporate purposes, including funding of potential future acquisitions.

Closing is expected on Nov. 18.

Anticimex is a Stockholm-based preventive pest control company.

Air Canada strengthens

Air Canada’s term loan moved up to 97¼ bid, 98¼ offered on Friday from 97 bid, 98 offered on Thursday following the company’s third quarter news, according to a trader.

For the quarter, the company reported a net loss of $508 million, or $1.42 per diluted share, compared to a net loss of $640 million, or $1.79 per diluted share, in the third quarter of 2021

Operating revenues for the quarter were $5.322 billion, an increase of about two-and-a-half times from $2.103 billion in the third quarter of 2021, and operating income was $644 million compared to an operating loss of $364 million in the third quarter of 2021. This was the company’s first quarterly operating income since the start of the pandemic.

EBITDA, excluding special items, for the quarter was $1.057 billion, versus negative EBITDA, excluding special items, of $67 million in the comparable period in 2021.

As of Sept. 30, the company’s total liquidity was over $10.2 billion.

Air Canada is a Montreal-based airline company.

Charter B-1 dips

Charter Communications’ term loan B-1 softened to 98 5/8 bid, 99 1/8 offered from 98¾ bid, 99¼ offered with its third quarter numbers, a trader remarked. The company’s term loan B-2 was unchanged to 97¾ bid, 98¼ offered.

For the third quarter, the company reported net income of $1.185 billion, or $7.38 per diluted share, compared to $1.217 billion, or $6.50 per diluted share, in the 2021 third quarter. The increase in the per share income was primarily the result of a 13.2% decrease in basic weighted average common shares outstanding versus the prior year period. Earnings per share fell short of the Zacks Consensus Estimate of $7.94 per diluted share.

Revenues for the quarter were $13.55 billion, up from $13.146 billion in the previous year, and adjusted EBITDA was $5.412 billion, up from $5.286 billion in the third quarter of 2021.

Third quarter net cash flows from operating activities totaled $3.8 billion, down from $4.3 billion in the prior year quarter primarily due to higher cash taxes and the payment of litigation settlements, partly offset by higher adjusted EBITDA.

And, third quarter free cash flow was $1.5 billion, down by 39.1% year-over-year, primarily due to capital expenditures associated with the company’s rural construction initiative and higher cash taxes.

Charter is a Stamford, Conn.-based broadband communications company and cable operator.

Avantor inches up

Avantor’s term loan B-5 rose to 98 1/8 bid, 98 7/8 offered from 98 bid, 98¾ offered after its quarterly numbers surfaced, according to a trader.

For the third quarter, the company reported net income of $167 million, or $0.25 per diluted share, compared to net income of $156.8 million, or $0.24 per diluted share, in the third quarter of 2021.

Net sales for the quarter were $1.857 billion, up from $1.834 billion for the comparable period in the prior year, and adjusted EBITDA was $384 million, up from $359.2 million in the previous year.

Operating cah flow for the quarter was $258.3 million and free cash flow was $219.3 million.

Adjusted net leverage was 3.6x as of Sept. 30, down from 3.9x as of June 30 and down 0.6x year-to-date.

Avantor is a Radnor, Pa.-based provider of mission-critical products and services to customers in the life sciences and advanced technologies & applied materials industries.

Loan indices rise

In other news, IHS Markit’s iBoxx loan indices were stronger on Thursday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.03% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.12%.

Month to date, the MiLLi is up 0.66% and year to date its down 3%. The LLLi is up 1.05% month to date and down 3.8% year to date.

Average secondary market bids in the U.S. on Thursday were 92.29, up 0.03% from the previous day and down 4.71% year to date.

According to the IHS Markit data, some of the top advancers on Thursday were Cineworld’s February 2018 U.S. covenant-lite term loan at 28.30, up from 25.81, Doncasters’ March 2020 term loan B2 at 90.38, up from 87.67, and MetroNet Systems’ June 2021 covenant-lite term loan at 99, up from 96.98.

Some top decliners on Thursday were National CineMedia’s June 2018 term loan B at 40.50, down from 45.23, Cyxtera’s May 2017 covenant-lite term loan at 84, down from 88.15 and Phoenix Services International’s January 2018 term loan at 19.38, down from 20.23.

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