Univar Solutions term loans gain ground on buyout news; RelaDyne discloses price talk

By Sara Rosenberg

New York, March 14 – In the secondary market on Tuesday, Univar Solutions Inc.’s term loans headed higher following news that the company is being acquired by Apollo.

Meanwhile, in the primary market, RelaDyne Inc. released price talk on its add-on first-lien term loan B-2 in connection with its lender call.

Univar rises

Univar’s 2026 and 2028 term loans strengthened to 99¾ bid, par ¼ offered on Tuesday from 99¼ bid, par offered on Monday after the company disclosed it is being purchased by Apollo, a trader said.

A commitment for $3.5 billion of new senior secured credit facilities – split between a $1.4 billion asset-based revolver and a $2.1 billion term loan – and a $2 billion senior secured bridge loan have been obtained to help fund the buyout.

Along with the debt, $3.8 billion of equity, which includes a minority investment from a wholly owned subsidiary of the Abu Dhabi Investment Authority, will be used for the transaction.

J.P. Morgan Securities LLC, BMO Capital Markets, BNP Paribas Securities Corp., Credit Suisse, Guggenheim Securities LLC, HSBC Securities (USA) Inc., Mizuho Securities USA LLC, RBC Capital Markets LLC and Wells Fargo Securities LLC are serving as financial advisers to Apollo. Goldman Sachs & Co. LLC and Deutsche Bank Securities Inc. are serving as financial advisers to Univar.

Univar, a Downers Grover, Ill.-based specialty chemical and ingredient distributor, is being bought for $36.15 per share in cash. The transaction has an enterprise value of about $8.1 billion.

Closing is expected in the second half of this year, subject to shareholder and regulatory approvals.

Secondary improves

In general, the secondary market was a little better on Tuesday, with paper up around a half point, a trader remarked.

The trader added that there were only a few credits that moved lower over the course of the day.

The day was an improvement from Monday, when, generally speaking, BB paper was down about a half a point, B+ paper was down about three quarters of a point and B- paper was down about a point-plus.

Loan indices drop

IHS Markit’s iBoxx loan indices were lower on Monday, with the Leveraged Loan indexes (MiLLi) closing out the day down 0.64% and the Liquid Leveraged Loan indices (LLLi) closing out the day down 0.92%.

Month to date, the MiLLi is down 0.58% and year to date it is up 2.60%, and the LLLi is down 0.80% month to date and up 2.10% year to date.

Average secondary market bids in the U.S. on Monday were 91.44, down 0.35% from the previous day and down 0.49% year to date.

According to the IHS Markit data, some of the top advancers on Monday were Chassix’s November 2017 covenant-lite term loan B at par, up from 84.95, Vantage Specialty’s October 2017 second-lien covenant-lite term loan at par, up from 96.15, and Lucky Bucks’ July 2021 covenant-lite term loan at 39.14, up from 38.13.

Some top decliners on Monday were City Brewing’s April 2021 covenant-lite term loan at 41.40, down from 44.36, Forest City’s November 2019 term loan B at 85.50, down from 91.40, and Convergeone’s January 2019 covenant-lite term loan at 59.88, down from 63.27.

RelaDyne guidance

Switching to the primary market, RelaDyne held its lender call at 11 a.m. ET on Tuesday and announced original issue discount talk of 96.5 to 97 on its fungible $350 million add-on first-lien term loan B-2 due December 2028, according to a market source.

Like the existing $250 million term loan B-2 due December 2028, the add-on term loan B-2 is priced at SOFR plus 500 bps with a 0.5% floor and no CSA.

The add-on term loan B-2 has 101 soft call protection for six months.

Commitments are due at noon ET on March 24, the source added.

RBC Capital Markets, BMO Capital Markets, KeyBanc Capital Markets, Macquarie Capital (USA) Inc., U.S. Bank and Fifth Third are leading the deal that will be used to fund the acquisition of Sun Coast Resources, a specialty distribution and logistics provider primarily focused on distributing diesel, lubricants, and providing logistics services to support a diverse customer base across the Texas/Gulf Coast region.

RelaDyne is a Cincinnati-based provider of lubricant and fuel sales & distribution and equipment reliability services to the industrial, commercial and automotive industries.

Fund flows

In other news, actively managed loan fund flows on Monday were negative $113 million and loan ETFs were negative $241 million, market sources said.

Outflows for loan funds week-to-date total an estimated $677 million, following outflows in the prior week of $239 million, sources added.

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