Starwood Property, Ineos Group free to trade; AerCap softens with market heaviness

By Sara Rosenberg

New York, Nov. 3 – Starwood Property Mortgage LLC increased the size of its term loan B and lowered the spread before breaking for trading during Thursday’s session, and Ineos Group Holdings’ U.S. term loan B freed up as well.

In addition, AerCap Holdings NV’s term loan was a little softer in the secondary market despite the release of favorable third quarter numbers as the market in general was weaker.

Starwood revised, breaks

Starwood Property raised its five-year first-lien senior secured sustainability term loan B to $600 million from $400 million and trimmed pricing to SOFR plus 325 basis points from talk in the range of SOFR plus 350 bps to 375 bps, a market source remarked.

As before, the term loan has 0 bps CSA, a 0.5% floor, an original issue discount of 97 and 101 soft call protection for six months.

Recommitments were due at 10:30 a.m. ET on Thursday and the term loan freed to trade shortly thereafter, with levels quoted at 97½ bid, 98½ offered, a trader added.

Morgan Stanley Senior Funding Inc. is the left lead on the deal that will be used to fund or refinance, in whole or in part, recently completed or future eligible green and/or social projects. Pending full allocation of an amount equal to the net proceeds to eligible green and/or social projects, the company intends to use the net proceeds to repay repurchase facilities.

Closing is expected in mid-November.

Starwood Property Mortgage is a commercial mortgage real estate investment trust.

Ineos hits secondary

Ineos Group’s $1.2 billion five-year term loan B also broke for trading, with levels quoted at 97 bid, 97½ offered, a market source said.

Pricing on the U.S. term loan is SOFR+10 bps CSA plus 375 bps with a 0% floor and it was sold at an original issue discount of 96.5. The debt has 101 soft call protection for one year.

The company is also getting an €800 million five-year term loan B priced at Euribor plus 400 bps with a 0% floor and issued at a discount of 96.5. This tranche has 101 soft call protection for one year as well.

During syndication, the U.S. term loan was upsized from a revised amount of $1 billion and an initial size of $750 million, and pricing firmed at the low end of the SOFR plus 375 bps to 400 bps talk. Additionally, the euro term loan was upsized from a revised amount of €650 million and an initial size of €400 million, and pricing was set at the low end of the Euribor plus 400 bps to 425 bps talk. And, the discount on both loans finalized at the tight end of revised talk of 96 to 96.5 and tighter than initial talk in the range of 95 to 96.

Ineos extending

Proceeds from the Ineos’ new term loans will be used to extend, in part, the existing U.S. and euro term loan Bs due March 2024 by 3½ years and for general corporate purposes.

JPMorgan Chase Bank and Deutsche Bank Securities Inc. are the joint global coordinators on the loans, with JPMorgan the left lead and sole physical bookrunner on the U.S. piece, and Deutsche and JPMorgan joint physical bookrunners on the euro piece. ABN Amro, Barclays, Credit Agricole, Commerzbank, ING, Intesa, KBC and MUFG are mandated lead arrangers. Barclays is the administrative agent.

The U.S. borrower is Ineos US Finance LLC and the euro borrower is Ineos Finance plc.

Ineos is a London-based chemicals company.

AerCap dips

AerCap’s term loan dropped to 98 3/8 bid, 98 7/8 offered on Thursday from 98½ bid, 99 offered on Wednesday even though the company reported solid third quarter results, according to a market source.

The source explained that the market in general was down at least an eighth of a point, probably more like a quarter of a point, and that was likely why AerCap softened.

For the quarter, the Dublin-based aircraft leasing company reported net income of $441.3 million, or $1.82 per diluted share, compared to $441 million, or $3.35 per diluted share in the third quarter of 2021.

Total revenues and other income for the quarter were $1.724 billion, up from $1.454 billion in the comparable 2021 period.

“We are pleased to report another strong quarter of results for AerCap. We continued to see robust demand for air travel and growing demand for both new and used leased aircraft and engines. We generated strong net income and cash flow and achieved our target leverage ratio well ahead of our expectations. As a result, we are raising our guidance for full year 2022,” said Aengus Kelly, chief executive officer, in a news release.

Full year 2022 adjusted earnings per share guidance was raised to a range of $8.00 to $8.50 from the previous range of $6.50 to $7.00, given strong performance year to date and fourth quarter outlook.

Loan indices rise

In other news, IHS Markit’s iBoxx loan indices were stronger on Wednesday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.12% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.14%.

Month to date, the MiLLi is up 0.28% and year to date its down 2.48%. The LLLi is up 0.38% month to date and down 3.07% year to date.

Average secondary market bids in the U.S. on Wednesday were 92.39, up 0.04% from the previous day and down 4.61% year to date.

According to the IHS Markit data, some of the top advancers on Wednesday were RegionalCare/LifePoint Health’s November 2018 covenant-lite term loan B at 90.15, up from 88.29, Consolidated Communications’ April 2021 covenant-lite term loan B1 at 84.60, up from 82.94, and Canopy Growth’s March 2021 term loan at 83.75, up from 82.31.

Some top decliners on Wednesday were Mitel Networks’ November 2018 covenant-lite fourth out no roll-up term loan at 32.50, down from 55.69, Rackspace Hosting’s February 2021 covenant-lite term loan B at 63, down from 65.25, and Endo Pharmaceuticals’ March 2021 covenant-lite term loan B at 80.75, down from 82.06.

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