content

Avast! Investor Demand for Yield Drives Leveraged Loan to Price Atop Par

Avast Software this week allocated to accommodating investors its $50 million and €75 million incremental add-on leveraged loans backing general corporate purposes. The credit is of note in that it is only the second leveraged loan in recent years to price atop par, meaning that investors paid a premium to own a piece of the debt.

In the leveraged loan market credits often are syndicated with an original-issue discount, 99 cents on the dollar, for instance. As in the bond markets, this discount can flex higher or lower, depending on investor demand, though par – 100 cents on the dollar – historically has been the ceiling.

Not so with Avast, which is rated BB-, the highest rating in the speculative-grade category. The loan backing the anti-virus/cybersecurity concern found much interest from yield-starved institutional investors, who continue to struggle to put cash stores to work. So much, in fact, that the company and its arrangers cut the discount on the loan to 100.5, from 100.

The last U.S. leveraged loan to price atop par: Yogurt-maker Chobani, in March.

Full terms on the Avast credit:

Borrower Sybil Software LLC
Issue $50M incremental TLB
Spread L+325
Price 100.5
LIBOR floor 1%
Maturity Sep-23
YTM 4.45%
Call protection 101 soft-call to Sept. 30
Covenants None
Corporate ratings BB-/Ba3
Facility ratings BB-/Ba3
Bookrunner CS
Agent CS
Px talk L+325, 1%, par, revised to 100.25–100.50
Borrower Avast Software BV
Issue €75M incremental TLB
Spread E+350
Price 100.5
Euribor floor 0%
Maturity Sep-23
YTM 3.45%
Call protection 101 soft-call to Sept. 30
Covenants None
Corporate ratings BB-/Ba3
Facility ratings BB-/Ba3
Bookrunner CS
Agent CS
Px talk E+350, 0%, par, revised to 100.25–100.50
Notes Increased from €50M

Try LCD for Free! News, analysis, data

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

 

Leave a Reply

Comments are moderated and will not appear until the admin has approved them.