Ares Capital grows even bigger with $3.4B American Capital purchase

Two of the largest listed BDCs are merging to form a middle market lending behemoth that will have $13 billion in investments (at fair value). The largest, Ares Capital (ticker: ARCC), announced yesterday that it’s buying American Capital (ticker: ACAS) for $3.4 billion.

The purchase will put even more miles between ARCC and its nearest competitor, now Prospect Capital (ticker: PSEC), which has $6.2 billion in assets against ARCC’s $9.3 billion. The ACAS portfolio will give ARCC another $4.7 billion in investments and expand the number of portfolio companies to 385 from 220.

With the purchase, ARCC will gain scale and flexibility to underwrite larger commitments to compete against traditional banks. Last year’s financing for American Seafoods Group whetted ARCC’s appetite for bigger names. After all, bigger deals generate bigger underwriting and distribution fees. ARCC underwrote an $800 million loan for American Seafoods, snagging a mandate that typically would’ve gone to large banks.

ARCC management yesterday said that it wants the ability to extend commitments of $500 million to $1 billion for any one transaction, with the aim of holding $250 million, whereas before ARCC would go as large as $300 million, with the aim of holding $100 million.

The ACAS purchase also will give ARCC more breathing room under its 30% non-qualifying bucket to ramp its new joint-venture fund with Varagon. The Varagon platform is replacing ARCC’s joint-venture with GE Capital, which began to wind down last year in the wake of GE Capital asset sales.

The boards of directors of both companies have unanimously approved the acquisition.

The purchase requires shareholder approvals and is contingent on the $562 million sale of ACAS’s mortgage unit to American Capital Agency (ticker: AGNC) in a separate transaction.

Elliott Management, holder of a 14.4% interest in American Capital, strongly supports the transactions and will vote its shares in favor.

Ares Management agreed to an income-based fee waiver of up to $100 million for the first ten quarters after closing.

The combined company will remain externally managed by Ares Capital Management LLC, and all current Ares Capital officers and directors will remain in their current roles.

ACAS will continue with planned asset sales ahead of closing, in collaboration with Ares. ACAS hired Goldman Sachs and Credit Suisse in January to vet buyers. Since March 31, ACAS has announced sales of over $550 million in balance sheet investments. In addition to the mortgage business, ACAS is looking to sell its European Capital assets. — Kelly Thompson/Jon Hemingway


Senate hearing opens discussion on BDC regulation changes

A hearing by the Senate banking committee showed bi-partisan agreement for BDCs as a driver of growth for smaller U.S. companies, but exposed some rifts over whether financial companies should benefit from easier regulation.

BDCs are seeking to reform laws, including allowing more leverage of a 2:1 debt-to-equity ratio, up from the current 1:1 limit. They say the increase would be modest compared to existing levels for other lenders, which can reach 15:1 for banks, and the low-20x ratio for hedge funds.

A handful of BDCs are seeking to raise investment limits in financial companies. They argue that the current regulatory framework, dating from the 1980s when Congress created BDCs, fails to reflect the transformation of the U.S. economy, away from manufacturing.

BDCs stress that they are not seeking any government or taxpayer support.

They are also seeking to ease SEC filing requirements, a change that would streamline offering and registration rules, but not diminish investor protections.

Ares Management President Michael Arougheti told the committee members in a hearing on May 19 that although BDCs vary by scope, they largely agree that regulation is outdated and holding back the industry from more lending from a sector of the U.S. economy responsible for much job creation.

“While the BDC industry has been thriving, we are not capitalized well enough to meet the needs of middle market borrowers that we serve. We could grow more to meet these needs,” Arougheti said.

In response to criticism about expansion of investment to financial services companies, the issue of the 30% limit requires further discussion, Arougheti said.

The legislation under discussion is the result of lengthy bi-partisan collaboration and reflects concern about increased financial services investments, resulting in a prohibition on certain investments, including private equity funds, hedge funds and CLOs, Arougheti added.

“There are many financial services companies that have mandates that are consistent with the policy mandates of a BDC,” Arougheti added.

Senator Elizabeth Warren (D-MA) raised the issue of high management fees of BDCs even in the face of poor shareholder returns. Several BDCs have indeed moved to cut fees in order to better align interests of shareholders and BDC management companies.

She said that Ares’ management and incentive fees have soared, at over 35% annually over the past decade, outpacing shareholder returns of 5%, driving institutional investors away from the sector, and leaving behind vulnerable mom-and-pop retail investors. Arougheti countered by saying reinvestment of dividends needed to be taken into account when calculating returns, and said institutional investors account for 50–60% of shareholders.

Warren said raising the limit of financial services investment to 50%, from 30%, diverts money away from small businesses that need it, while BDCs still reap the tax break used to incentivize small business investment.

“A lot of BDCs focus on small business investments and fill a hole in the market. A lot of companies in Massachusetts and across the country get investment money from BDCs,” said Warren.

“If you really want to have more money to invest, why don’t you lower your high fees and offer better returns to your investors? Then you get more money, and you can go invest it in small businesses,” Warren said.

Brett Palmer, President of the Small Business Investor Alliance (SBIA), said the May 19 hearing, the first major legislative action on BDCs in the Senate, was a step toward a bill that could lead to a new law.

“There is broad agreement that BDCs are filling a critical gap in helping middle market and lower middle market companies grow. There is a road map for getting a BDC bill across the finish line, if not this year, then next,” Palmer said, stressing the goal was this year.

Technically, the hearing record is still open. The Senate banking subcommittee for securities and investment could return with further questions to any of the witnesses. Then, senators can decide what the next stop will be, ranging from no action to introduction of a bill.

Pat Toomey (R-PA) brought up the example of Pittsburgh Glass Works, a company that has benefited from a BDC against a backdrop that has seen banks pulling back from lending to smaller companies following the financial crisis, resulting in a declining number of small businesses from 2009 to 2014.

The windshield manufacturer, a portfolio company of Kohlberg & Co., received $410 million in financing, of which $181 million came from Franklin Square BDCs.

“Business development companies have stepped in to fill that void,” Toomey told the committee hearing. “For Pittsburgh Glass, it was the best financing option available to them.”

FS Investment Corp.’s investment portfolio showed a $68 million L+912 (1% floor) first-lien loan due 2021 as of March 31, an SEC filing showed.

Arougheti cited the example of OTG Management, a borrower of Ares Capital. OTG Management won a contract to build out and operate food and beverage concessions at JetBlue’s terminal at New York airport JFK, but was unable to borrow from traditional senior debt lenders or private equity firms due to its limited operating history.

Ares Capital’s investment in OTG Management included a $24.7 million L+725 first-lien loan due 2017 as of March 31, an SEC filing showed. — Abby Latour

Follow Abby on Twitter @abbynyhk for middle-market deals, leveraged M&A, BDCs, distressed debt, private equity, and more.


Default Protection Costs on Community Health Debt Soars After 1Q Earnings Miss

Debt backing Community Health Systems was under pressure this morning after the hospital operator yesterday afternoon released weaker-than-expected first-quarter results. The benchmark 6.875% notes due 2022 traded off a point, at 87.5, while the 8% notes due 2019 changed hands in large blocks two points lower, at 98.625, trade data show.

Five-year credit protection on the issuer blew out roughly 49%, to 10.875/12.875 points upfront, according to Markit. That’s essentially $388,000 more expensive, at a roughly $1.2 million upfront payment at the midpoint, in addition to the $500,000 annual payment, to protect $10 million of Community Health bonds.

Over in the leveraged loan market, the hospital operator’s debt is lower following the first-quarter report. The H term loan due 2021 (L+300, 1% LIBOR floor) slid roughly a point, to a 97.5/98 market, according to sources.

First-quarter net sales were approximately $5 billion, up from $4.9 billion in the year-ago period and in line with the S&P Global Market Intelligence consensus mean analyst estimate, filings showed. However, the EBITDA figure of $633 million in the quarter was down from $715 million last year and well below the consensus mean estimate for $700 million.

The company’s shares, which trade on the NYSE under the ticker CYH, tumbled roughly 14% on the report, to $13.53.

In addition to the results, the company surprised investors with a partial tender offer targeting $900 million of its most pressing maturity, the $1.6 billion issue of 5.125% notes due 2018. The paper jumped nearly two points on the news, to 102/102.5, versus the tender offer price of $1,023, inclusive of an early tender premium of $30 per bond. Valuation essentially represents the middle of the current call price of 102.5625 and the upcoming decline to 101.281 in August.

A conference call was scheduled for 11 a.m. EDT today.

Community Health is rated B+/B1/B+, with negative/negative/stable outlooks. The loans are rated BB/Ba2/B+, with a 1 recovery rating from S&P, while the unsecured bonds are rated B–/B3/B, with a 6 recovery rating from S&P. — Matt Fuller/Kerry Kantin

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This story first appeared on, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.


CORE Entertainment files Ch. 11 as American Idol popularity wanes

CORE Entertainment, the owner and producer of American Idol, has filed for bankruptcy as the once-popular television show concluded its final season.

The company’s debt included a $200 million 9% senior secured first-lien term loan due 2017 dating from 2011, and a $160 million 13.5% second-lien term loan due 2018. U.S. Bank replaced Goldman Sachs as agent on both loans, which stem from Apollo’s buyout of the company, formerly known as CKx Entertainment, in 2012.

Principal and interest under the first-lien credit agreement has grown to $209 million, and on the second-lien loan to $189 million, court documents showed.

A group of first-lien lenders consisting of Tennenbaum Capital Partners, Bayside Capital, and Hudson Bay Capital Management have hired Klee, Tuchin, Bogdanoff & Stern and Houlihan Lokey Capital as advisors. Together with Credit Suisse Asset Management and CIT Bank, these lenders hold 64% of the company’s first-lien debt.

Crestview Media Investors, which holds 34.8% of first-lien debt and 79.2% under the second-lien loan, hired Quinn Emanuel Urquhart & Sullivan and Millstein & Co. as advisors.

The debtor also owes $17 million in principal and interest under an 8% senior unsecured promissory note.

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 company’s business model relied upon continued popularity of American Idol and So You Think You Can Dance. In late 2013, the company sold ownership of most of rights to the name and image of boxer Muhammed Ali, and of trademarks to the name and image of Elvis Presley and the operation of Graceland, and failed to acquire assets to offset the loss of that revenue.

The bankruptcy filing was blamed on the cancellation of American Idol by FOX for the 2017 season. Following a decline in ratings, FOX said that the 2016 season would be the show’s final one.

The filing was today in the U.S. Bankruptcy Court for the Southern District of New York. — Abby Latour

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Intelsat debt, shares edge higher on 1Q results, new bond guarantee

Intelsat debt and shares advanced today after the satellite giant reported better-than-expected first-quarter results and reaffirmed its 2016 sales and earnings outlook based on the ongoing demand for broadband data, a heavy backlog of contracts, the successful launch of a new satellite last month, and preparation for the launch of more of its next generation fleet.

Most notably, however, investors heard that that a first-lien guarantee is now in place on a previously non-guaranteed series of Intelsat Jackson 6.625% senior notes due 2022, and that CC/Caa3 paper surged six points, to 64/65, according to sources.

Other bonds at various spots in the multi-tiered issuer were mixed. The previously guaranteed Intelsat Jackson 5.5% senior notes due 2023, which are notched higher, at CCC/Caa2, slipped two points, with trades reported on either side of 63, while the same entity’s first-lien 8% notes due 2024 dipped three quarters of a point, to 103.25/103.75, according to sources and trade data.

Meanwhile, at parent Intelsat Luxembourg 8.125% notes due 2023, which are a deeper step lower, at CC/Ca, the paper advanced two points, to 28.5/29.5, according to sources. And other “Jackson” bonds were steady, like the 7.5% notes due 2021, which held 69.5/70.5, the sources added.

Over on the NYSE, the company’s shares, which trade under the symbol “I,” increased roughly 6.5% this morning, to $3.93.

In the loan market, the Intelsat’s B-2 term loan due 2019 (L+275, 1% floor) was marked 94.125/94.625 on the results, up from either side of 94 prior, albeit a 95 context a week ago, according to sources.

Revenue in the quarter was $552.6 million, which was down from $602.3 million in the year-ago first quarter, but roughly 2% higher than the S&P Global Market Intelligence consensus estimate for $542.8 million, filings showed. As for the EBITDA result, first-quarter earnings were $407.5 million, which was down from $460.5 million last year, but right in line with the S&P GMI consensus mean estimate for $408.4 million.

Looking ahead, the company left unchanged via reaffirmation its full-year 2016 outlook for revenue of $2.14–2.20 billion and adjusted EBITDA to $1.625–1.675 billion, filings show.

Recall that the abovementioned, first-lien 8% notes were issued at par last month, with B–/B1 ratings, via Goldman Sachs and Guggenheim to support general corporate purposes, including prepayment in full of an intercompany loan of $360 million that upstreamed a dividend to parent “Luxembourg.” That issuance halted access to the “Jackson” undrawn revolver and triggered the guarantee to the 6.625% notes, according to a company statement.

Luxembourg-based Intelsat completed its IPO in April 2013, but a BC Partners–led group named Serafina still owns a majority of the satellite concern’s common shares. Prior to today’s rally, the company’s market capitalization on the NYSE was approximately $400 million. — Matt Fuller/Kerry Kantin

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Cannery Casino loans edge closer to par as Boyd to buy Vegas assets

Loans backing Cannery Casino edged closer to par on news that Boyd Gaming agreed to purchase the company’s Las Vegas assets for $230 million. The sale represents the remainder of the company’s assets—recall late last year Cannery entered into a revised deal to sell The Meadows Racetrack and Casino to Gaming & Leisure Properties—and with both asset sales, the company’s first- and second-lien loans are expected to be fully repaid, according to sources.

In turn, the first-lien term loan due 2018 (L+475, 1.25% LIBOR floor) is marked a half-point higher following the news, at 99.5/100, according to sources. The second-lien term loan due 2019 (L+1,075, 1.25% floor) moved up to a 99.5 bid, from 98.75 yesterday morning, according to sources.

The Las Vegas transaction, which was announced late yesterday, is expected to close in the third quarter. NYSE-listed Boyd said it expects to fund the transaction with cash on hand. Accounting for expected synergies and operating refinements, Boyd said it expects the Cannery assets to generate $32 million in EBITDA during its first year of ownership, which implies a purchase price multiple of about 7.2x.

As reported, privately held Cannery and GLPI in December entered into an amended agreement in which GLPI will acquire the Meadows property for $440 million. At the time, the companies said closing was expected in the second half of 2016, with an outside closing date of November 2016. Cannery Co-CEO William Paulos said all net proceeds would be used to reduce debt. (For additional details, see “Cannery Casino TLs quoted higher on news of amended asset-sale deal,” LCD News, Dec. 16, 2015.)

Cannery Casino is rated B–/Caa1. The issuer’s existing loans, an originally $385 million first-lien term loan and a $165 million second-lien term loan, date back to 2012, proceeds of which were used to refinance debt. Deutsche Bank is administrative agent. — Kerry Kantin


Par for the Course? Leveraged Loan Bids Rise as Market Tone Brightens

loans bid par or higher

The share of U.S. leveraged loans bid in the secondary market at par or higher – that’s 100 cents on the dollar – reached 20% this week, according to S&P Global Market Intelligence LCD.

While that’s well inside the 64% figure from a year ago, it’s a huge improvement from a mere 1.3% in January, demonstrating how much market tone has brightened of late (a factor here: actual cash inflows into the asset class during March, after a crippling string of withdrawals).

This analysis uses bids on loans contained in the S&P/LSTA Loan Index. – Staff reports

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This story is from a longer piece of analysis by LCD’s Kerry Kantin, originally published on www.lcdcomps.comLCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets.

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More CLOs may be called as loan prices rally, cash to equity drops

The recent rally in loan prices has prompted equity investors to start exercising calls on CLOs, with potentially more on the way if the current upswing continues.

So far, two CLO 2.0s have been called this year, both in April. This follows 13 2.0 optional redemptions in 2015 and six in 2014 In total, 10 CLOs have been called this year, following 89 in 2015, 85 in 2014, and 75 in 2013, according to J.P. Morgan.

This year’s called 2.0 transactions are the Mill Creek CLO from 40/86 Advisors and Babson 2011-I, both of which were originally issued in 2011.

When looking at the factors that increase the likelihood of a call, analysts at Nomura determined that higher equity net asset values (NAVs), higher costs of funding, and lower cash flows to the equity increase the likelihood that a CLO gets called. Analysts at J.P. Morgan also cited the equity purchase price, loan sourcing conditions, and the type of investor holding the equity are additional factors.

The Mill Creek CLO, which is 15 months past its reinvestment period, saw average quarterly payments to its equity over the past few years of under 3%, well below the average CLO 2.0. Its most recent equity NAV was about 48% though, which is in the 82nd percentile across all 2.0s, according to data from Nomura analysts.

The Babson 2011-I, which is 19 months past its reinvestment period, similarly saw its average quarterly distributions to the equity fall to 2.9%, from 5%, while its NAV was around 44%, which is within the top quarter of CLO 2.0s.

Looking ahead, Nomura analysts see another nine CLO 2.0s past their reinvestment periods that are candidates for an optional call since their quarterly equity distributions have fallen by 1.2% or more and their equity NAVs are above 36%.

Analysts at J.P. Morgan believe that a sustained rally in loan prices could lead to more CLO 2.0s getting called since the call also provides an exit for some of the equity that has exchanged hands over the past few months.

The entire CLO 1.0 universe is otherwise past its non-call and reinvestment periods at this point. The 2006 vintages were over half of the total CLO 1.0s called last year followed by the 2007 vintage. Over the next few years, J.P. Morgan analysts anticipate that the 2007 vintage will take over as the most actively called. Typically CLO 1.0s that were called in 2015 had 32% of the original transaction size outstanding and were about three years past the end of their reinvestment periods.

The same goes for Europe
In Europe too, some expect improved secondary loan market prices to trigger more CLO redemptions. In its April 8 European Asset-Backed Barometer, Deutsche Bank Markets Research suggested several other deals issued in late 2005/2006 that may become economical to call, including Wood Street II (Alcentra), Green Park 2006-1 (Blackstone), Boyne Valley CLO (via AIB Capital Markets), and Theseus 2006-1 (Invesco).

There has been a marked increase in loan BWIC activity in both the U.S. and European secondary loan markets in recent weeks, some of which may related to CLO redemptions, sources said. Through April 8, 14 European BWICs totaling €744 million have been put up for sale, versus €1.2 billion from nine BWICs in the same period last year, according to LCD data. That’s a 56% increase in deal count over last year, although the volume figure trails by 40%. Meanwhile, in the U.S., there has been a flurry of BWIC and OWIC activity as well, with the amount of loans put up for sale via BWICs through April 8 standing at $5.5 billion, up from $1.6 billion in the year-ago period. CLO 1.0 redemptions have driven these portfolio sales.

Three European CLOs have been called so far in 2016, including BNPP IP’s Leveraged Finance Europe Capital IV, Versailles CLO M.E.I, and Dalradian European CLO IV. In 2015, LCD tracked 28 call notices, with 26 issued by CLO 1.0 transactions and two by CLO 2.0s. The most recent European CLO BWIC was for a pending CLO redemption from a large, established manager. — Andrew Park/Sarah Husband


Loan bids grind higher, log fourth-consecutive increase

Reflective of the continued strong tone in the secondary loan market over the past couple of trading sessions, the average bid of LCD’s flow-name loan composite edged up 10 bps in today’s reading, to 98.83% of par, from the previous reading of 98.73 on April 12.

The composite was biased towards the upside, with nine loans advancing, three declining, and three unchanged from the previous reading. The Neiman Marcus covenant-lite term loan due 2020 (L+325, 1% LIBOR floor) was the biggest gainer, with a half-point increase. No other loan moved more than a quarter-point in either direction.

All told, the average bid is up 43 bps from March’s final reading of 98.40 and 328 bps from the year-to-date low of 95.55 on Feb. 23.

Over in the new-issue market, the strength is on display, with arrangers flexing down 13 deals over the past two weeks, while flexing higher only three. The market hasn’t seen this many deals flex lower since the beginning of August. In addition to the lower pricing, other issuer-friendly terms are getting through the market. A case in point is Samsonite, whose heavily oversubscribed M&A loan includes a 12-month MFN sunset provision.

Technicals have shifted in favor of issuers, as this week’s secondary—and primary—market activity demonstrates. There are a few drivers behind this trend. For one, supply is weak. At $38.2 billion, LCD’s forward calendar is at its lowest level since the end of August, and subtracting the $33.7 billion of pending visible future repayments, the amount of net supply dwindles to a mere $4.7 billion.

As for the demand side of the ledger, CLO issuance remains stuck in low gear—thus far in April, the only pricing is the $424 million deal from BlueMountain Capital Management—and mutual fund flows continue to essentially break even (LCD data project a net inflow of $82 million for the week ended April 13). Still, there’s cash coming into the market away from these two traditional sources of inflows. As noted last week, repayments remain robust, courtesy of quarter-end amortization and excess-cash-flow payments, as well as a series of investment-grade takeovers closing in recent days, such as Sage Products, Swett & Crawford, TransFirst, and Truven Health Analytics.

Away from visible sources of inflows, players say there is cash coming in from cross-over accounts—high-yield, too, is suffering from a weak forward pipeline—while accounts are also deploying cash they kept on the sidelines earlier in the year. Also, there continues to be chatter that interest in the asset class from pension funds and other institutional accounts has picked up in recent weeks, though this too is difficult to quantify.

With the average loan bid gaining 10 bps, the average spread to maturity declined three basis points, to L+386.

By ratings, here’s how bids and the discounted spreads stand:

  • 99.49/L+374 to a four-year call for the 10 flow names rated B+ or higher by S&P or Moody’s; STM in this category is L+370.
  • 97.03/L+445 for the five loans rated B or lower by one of the agencies; STM in this category is L+431.

Loans vs. bonds
The average bid of LCD’s flow-name high-yield bond composite jumped 119 bps, to 96.57% of par, yielding 7.54%, from 95.38 on April 12. The gap between the bond yield and discounted loan yield to maturity stands at 328 bps. — Staff reports

To-date numbers

  • April: The average flow-name loan is up 43 bps from final March reading of 98.40.
  • Year to date: The average flow-name loan is up 166 bps from the first 2016 reading of 97.17.

Loan data

  • Bids up: The average bid of the 15 flow names rose 10 bps, to 98.83% of par.
  • Bid/ask spreads widened: The average bid/ask spread increased three basis points, to 38 bps.
  • Spreads lower: The average spread to maturity—based on axe levels and stated amortization schedules—fell three basis points, to L+386.

Loan bids ease slightly amid slight change to sample

The average bid of LCD’s flow-name composite eased five basis points in today’s reading, to 98.43% of par, from the prior reading of 98.48 on March 24.

Note that with today’s reading, there is a slight change to the sample. First Data’s term loan due March 2021 (L+400) replaces the issuer’s term loan due March 2018 (L+350), as the latter is being taken out via an extension and a partial paydown from a recent high-yield issue. The change has virtually no impact on the average bid price—the 2021 paper is bid at 99.75, versus 99.875 on the 2018 loan in Thursday’s reading—though the higher coupon helped push up the spread to maturity implied by the average bid to L+396, from L+392 on Thursday.

Among the other 14 names in the sample, one loan advanced, six loans declined, and seven loans were unchanged from the prior reading. Note, however, that no loan moved more than a quarter-point in either direction.

As this suggests, prices have leveled off in recent days, though activity has been muted given the long holiday weekend. While many names have limited, if any, upside potential left—11 of the 15 names are bid at 99 or higher following the market’s fantastic run-up that has pushed the average flow-name bid up 288 bps from its year-to-date low of 95.55—many market participants have shifted their gaze from the picked-over secondary to the new-issue market, which has livened up with the significant improvement in the secondary.

With the average loan bid slipping five basis points, the average spread to maturity edged up five basis points, to L+396.

By ratings, here’s how bids and the discounted spreads stand:

99.35/L+378 to a four-year call for the ten flow names rated B+ or higher by S&P or Moody’s; STM in this category is L+373.
95.88/L+481 for the five loans rated B or lower by one of the agencies; STM in this category is L+460.

Loans vs. bonds
The average bid of LCD’s flow-name high-yield bonds decreased 75 bps, to 93.07% of par, yielding 8.41%, from 93.82 on March 24. The gap between the bond yield and discounted loan yield to maturity stands at 412 bps. — Staff reports

To-date numbers

March: The average flow-name loan jumped 276 bps from the final February reading of 95.67.
Year to date: The average flow-name loan gained 126 bps from the first 2016 reading of 97.17.

Loan data

Bids lower: The average bid of the 15 flow names dropped five basis points, to 98.43% of par.
Bid/ask spreads fall: The average bid/ask spread tightened two basis points, to 42 bps.
Spreads increase: The average spread to maturity—based on axe levels and stated amortization schedules—rose five basis points, to L+396.