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BDC Carey Credit Income Fund launches public capital raise

W. P. Carey’s new non-traded business development company, Carey Credit Income Fund (CCIF), has begun to raise capital through its initial feeder fund Carey Credit Income Fund 2016 T. The feeder fund aims to raise roughly $1 billion at an initial offering price of $9.55 per share, according to an SEC filing.

CCIF will focus on investing in senior debt of large, privately negotiated loans to private middle market companies in the U.S., typically with EBITDA of $25-100 million and annual revenue ranging from $50 million to $1 billion. The fund may also invest in broadly syndicated bank loans and corporate bonds and other investments.

Carey Credit Advisors, an affiliate of W. P. Carey, is the advisor to CCIF, and Guggenheim Partners Investment Management, an affiliate of Guggenheim Partners, is the sub-advisor. W. P. Carey and Guggenheim have each made a $25 million initial capital investment in CCIF.

NYSE-listed W. P. Carey Inc. is an independent equity real estate investment trust with an enterprise value of around $11.2 billion. Guggenheim Partners is a privately held global financial services firm with more than $240 billion in assets under management as of March 31. – Jon Hemingway

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Antares Capital seeks $13.9B credit package in purchase by CPPIB from GECC

Credit Suisse, Deutsche Bank, and Citigroup are holding a lender meeting on Monday, July 27, at 11 a.m. EDT to launch the syndication of $13.9 billion of debt facilities in connection with Canada Pension Plan Investment Board’s purchase of Antares Capital from General Electric Capital Corp.

Financing will include two credit facilities: A $3.2 billion holdco credit facility and a $10.7 billion asset-based credit facility. The holdco senior secured credit facilities will include a $2 billion, five-year revolving credit and a $1.2 billion, five-year amortizing A term loan. Pricing on the senior secured holdco credit facilities will be tied to a ratings-based grid. The holdco facilities will carry two maintenance covenants, a total-net-asset-value test and an adjusted-asset-ratio test. The term loan will amortize at 5% in year one, 7.5% in year two, 10% in year three, and 12.5% each in years four and five with the balance due at maturity, according to sources.

The lead arrangers are also syndicating $10.7 billion of seven-year senior secured asset-backed credit facilities, comprised of a $3 billion asset-based revolving credit and a $7.7 billion, asset-based secured term loan. The asset-backed credit facilities will be secured by a portfolio of predominately first-lien senior secured term loans originated by Antares Capital. The facilities will have an equity cushion of 20% of the total portfolio value, with additional protections from traditional cash-trapping mechanics, revaluation events, and events of default that will provide remedies to the lenders.

Proceeds from the two credit facilities will be used to fund CPPIB’s announced acquisition of Antares Capital’s middle market sponsor finance business, including its integrated origination, underwriting and distribution platform, and to fund future growth.

CPPIB is contributing approximately $4 billion of equity to the transaction, according to sources. The business would be on a strong footing going forward; AAA rated CPPIB is one of the largest 10 managers of retirement funds globally, with about C$265 billion of assets under management.

Commitments will be due on Aug. 12, sources said.

GE Capital has long reigned as the dominant player in the middle market lending, defined by LCD as lending to companies that generate EBITDA of $50 million or less, or $350 million or less by deal size, although definitions vary among lenders.

Going forward, Antares Capital will operate as an independent business, and retain the name. Managing partners David Brackett and John Martin, who have led Antares since its formation, will continue to lead the stand-alone business. The sale is expected to close in the third quarter.

The sale accounts for $11 billion of ending net investment. GE Capital has announced sales of roughly $55 billion in all, and plans to complete $100 billion of sales this year. GE announced in April it would divest GE Capital, including its $16 billion sponsor finance business. GE Antares specializes in middle market lending to private-equity backed transactions. – Chris Donnelly

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AssuredPartners’ buyout by Apax backed by BAML, RBC, MS

Bank of America Merrill Lynch, RBC Capital Markets, and Morgan Stanley have provided committed debt financing to back Apax Partners’ acquisition of insurance brokerage AssuredPartners from GTCR.

Sources indicate the debt financing will be U.S.-focused.

AssuredPartners is one of the largest insurance brokerage firms in the U.S. It was formed in 2011 as part of a strategic partnership between private equity firm GTCR and the company’s CEO and COO. It has offices in more than 30 states, the District of Columbia, and London. – Nina Flitman

 

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RAAM Global Energy extends deadline for bond exchange again

Struggling oil and gas exploration and production company RAAM Global Energy has extended an exchange offer for its 12.5% secured notes due 2015 by an additional week.

The exchange offer, which is for new 12.5% notes due 2019 and RAAM common stock, was due to expire on July 16. The new deadline is July 23.

So far, roughly $226.5 million in principal of the 12.5% secured notes due 2015, or 95.2% of outstanding notes, has been tendered, a statement said. The company has previously extended the deadline several times.

In April, RAAM Global Energy said it would enter into discussions with senior term loan lenders and bondholders after failing to pay a $14.75 million coupon on the bonds due 2015.

Standard & Poor’s cut RAAM Global Energy’s corporate credit rating to D, from CCC-, and the issue-level rating on the company’s senior secured debt to D, from CCC-, after the missed bond interest payment. A month later, the ratings were withdrawn at the company’s request.

RAAM Global Energy sold $150 million of 12.5% secured notes due 2015 in September 2010 through bookrunners Global Hunter Securities and Knight Libertas. Proceeds funded general corporate purposes. The bond issue was reopened by $50 million in July 2011 and by another $50 million in April 2013.

The company also owes debt under an $85 million first-lien term loan due 2016. Wilmington Trust is agent.

RAAM Global Energy Company’s production facilities are in the Gulf of Mexico, offshore Louisiana and onshore Louisiana, Texas, Oklahoma, and California. – Abby Latour

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CORE Entertainment downgraded again; grace period on loan lapses

Moody’s downgraded ratings on CORE Entertainment, citing deteriorating earnings for its U.S. Idol franchise that Fox will not renew after the 2016 season, and the expiration of a 30-day grace period to make a missed loan interest payment.

“The negative outlook reflects the very high leverage, the decline of its Idol franchise, the missed interest payment on the 2nd-lien term loan, and negative free cash flow that elevates restructuring risk,” Moody’s said in a July 15 research note.

Leverage for the company, which owns and develops entertainment content, exceeded 10x as of the first quarter of 2015.

Standard & Poor’s cut CORE Entertainment ratings last month after the company missed the interest payment on a $160 million second-lien loan due 2018.

Moody’s cut CORE Entertainment’s corporate family rating yesterday to Ca, from Caa3, and a $200 million senior secured first-lien term loan due 2017 to Caa2, from Caa1. Moody’s affirmed a Ca rating on the $160 million second-lien term loan due 2018.

“Following the 2016 season of Idol, the company will be reliant on its So You Think You Can Dance (Dance), International Idol format revenue, and its Sharp Entertainment division for earnings which will increase the unsustainability of its capital structure with debt that starts to mature in June 2017,” Moody’s said.

“The cash balance has not been used to acquire EBITDA producing assets to offset the EBITDA lost following the Elvis Presley Enterprises sale and development of new programming content has been slower than expected.”

In June, Standard & Poor’s cut the rating on the 13.5% second-lien term loan due 2018 to C, from CCC-, lowered the company’s corporate rating to CCC-, from CCC+, and the rating on a $200 million senior first-lien term loan due 2017 to CCC-, from CCC+.

Investors in the company are Apollo Global Management and Crestview Partners.

CORE Entertainment, and its operating subsidiary Core Media Group, owns stakes in the American Idol television franchise and the So You Think You Can Dance television franchise.

The loans stem from Apollo’s buyout of the company, formerly known as CKx Entertainment, in 2012. – Abby Latour

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Carlyle hires Wight for middle-market operations role

The Carlyle Group has hired Jill R. Wight for a newly created operations role focusing on the firm’s middle-market portfolio.

She joins Carlyle as a principal, based in New York. Wight’s experience ranges from company oversight to executive development.

Previously, Wight was a director in the special situations group at Goldman Sachs, where she had been since 2008.

Prior to that, Wight was a vice president at GSC Group’s equity and distressed investing group where she led portfolio operations. She also worked at Bain & Company and Marakon Associates.

Carlyle is investing in middle-market companies from the two funds: Carlyle U.S. Equity Opportunity Fund, L.P. I & II. Investments include Service King, ECi Software Solutions, Traxys Group, AxleTech International Holdings, and PrimeSport. – Abby Latour

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Fifth Street JV with Kemper unit expands leverage with Credit Suisse

Fifth Street’s joint venture with a unit of insurance company Kemper Corp. has closed on $200 million of additional debt with Credit Suisse.

The joint venture, SLF JV I, is between Trinity Universal Insurance Company, a subsidiary of Kemper, and Fifth Street Finance Corp., a business-development company that trades on NASDAQ under the ticker symbol FSC.

“This additional leverage for SLF JV I should allow the joint venture to expand up to its anticipated investment capacity of $600 million,” Fifth Street said in an SEC filing today.

The joint venture closed on the additional leverage subsequent to the June quarter, the filing said.

“We continue to have discussions with third parties about additional partnerships, as we have ample capacity to grow these and other similar joint ventures,” the filing said.

At the same time, Fifth Street said its joint venture between Fifth Street Senior Floating Rate Corp. and entities controlled by Glick family members was roughly 45% invested out of a total capacity of $300 million, as of June 30.

That joint venture, FSFR Glick JV, was announced in November. Fifth Street Senior Floating Rate Corp. is a BDC that trades on Nasdaq under the ticker symbol FSFR.

Fifth Street repeated its forecast for returns in the low teens for the venture with Glick family members once it’s fully ramped.

FSFR and GF Funding committed to $100 million of subordinated notes and equity to the venture, with FSFR providing $87.5 million and GF Funding investing $12.5 million. It is funded by a $200 million revolver with Credit Suisse.

The Glick family office manages a wide range of asset classes, including a stake of more than 25% in Songbird Estates, the holding company of Canary Wharf.

Both FSC and FSFR are due to announce earnings for the June quarter next month. – Abby Latour

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LRW nets $75M TL, RC for buyout by Tailwind Capital

Bank of Ireland and MidCap Financial were arrangers on $75 million of buyout financing backing an acquisition of LRW (Lieberman Research Worldwide) by Tailwind Capital, sources said.

The financing comprised a $60 million, six-year term loan, and a $15 million, five-year revolver. Ally Financial was also a lender.

Besides the acquisition, the proceeds will fund targeted acquisition to strengthen the company’s global footprint, a company statement said.

LRW, based in Los Angeles, provides data-driven consulting services and market research to management teams. – Abby Latour

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Kendra Scott Design widens guidance on $70M loan

Lead arranger BNP Paribas has widened talk on the $70 million term loan for Kendra Scott Design, sources said.

Price talk for the six-year term loan is L+600, with a 1% LIBOR floor, offered at 99. Previously, the talk was L+500-525, with a 1% LIBOR floor, offered at 99. As revised, the yield to maturity is 7.41%, compared to 6.35-6.62% at launch.

The unrated term loan will include six months of 101 soft call protection. Financial covenants include a total-net-leverage test and fixed-charge coverage.

Proceeds from the deal will back a dividend recapitalization of Kendra Scott, a portfolio company of Norwest Venture Partners, according to sources. The financing package also includes a $15 million, five-year revolving credit.

Kendra Scott Design, based in Austin Tex., designs and retails jewelry for women. Norwest Venture Partners first invested in the company last year. – Abby Latour/Jon Hemingway

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Rapid Micro Biosystems closes $19M senior loans with Solar, Comerica

Rapid Micro Biosystems closed a $16 million term loan with Solar Capital and a $3 million revolver with Comerica Bank.

Proceeds fund working capital to help the company continue to commercialize its technology globally, a statement today said.

In December, the company received a $19 million senior secured credit facility, comprising a revolver and two term loans. Proceeds were for working capital. GE Capital’s Healthcare Financial Services was the agent.

Rapid Micro Biosystems, based in Lowell, Mass., sells products that detect microbial contamination in the manufacturing of pharmaceutical, biotechnology, and personal care products.

Solar Capital Partners invests in debt and equity of middle market companies. – Abby Latour

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