Levfin Market Remains Hot as Refis Defy August Lull

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The primary leveraged finance market showed no sign of slowing to start August as refinancings continued dominating new issuance.

The overall tone remains constructive, with the primary market staying busy and demand for paper holding up well, according to an investor. Yet, despite the market being open, investors are still being selective on pricing and credit quality.

That selectivity hasn’t slowed the calendar, which was heavily driven by refinancings. The largest one this week was Veritas-backed Gainwell Technologies, which is marketing a $4.34 billion debt package via JPMorgan, split between a term loan B and other first lien debt. The loan is talked wider than the current loan at SOFR+450 bps-475 bps and 98 OID, with commitments due Aug. 13. Proceeds from the offering, alongside an amended and extended $1.459 billion second lien loan, will refinance the company’s entire capital structure.

The Fidelis Partnership, or TFP, a global specialty insurance underwriter, launched a $2.04 billion seven-year first lien TLB via Morgan Stanley to refinance existing private debt. TFP secured a $2 billion private loan and revolver in 2024 from Blackstone Credit & Insurance, Oak Hill Advisors, Barings, PNC and Barclays, according to a press release. The new syndicated deal is talked at S+275 bps and 99-99.5 OID, with commitments due Aug. 12.

The deal marks the latest sign of borrowers refinancing private credit deals in the broadly syndicated market, following Catalent’s $4.1 billion refinancing that closed this week.

Also in the insurance industry, insurance broker IMA Financial Group is in the market with a $1.295 billion seven-year first lien TLB via BMO, talked at S+325 bps-350 bps and 99 OID, to repay its existing term loan due November 2028 and revolver borrowings. Notably, the new deal is coming in at a wider spread than the $1.014 billion loan IMA priced back in 2024 at S+300 bps.

Elsewhere, used-car retailer Carvana is marketing a $1 billion seven-year TLB via Barclays, talked at S+225 bps-250 bps and 99-99.5 OID. Proceeds, together with cash onhand, will pay down a portion of the company’s existing senior secured notes due 2030. Commitments are due Aug. 12.

WIN Waste Innovations also tapped the market this week with a $1.208 billion refinancing, split between a $914 million and a $294 million first lien TLB, both talked at S+275 bps and 99.75-par OID. Commitments for the Truist Bank-led deal are due today. Separately, the Macquarie Asset Management-backed company is currently in the early stages of a sale process, with Nomura Greentech and Macquarie Capital advising, Octus reported.

On the repricing front, commercial fire systems manufacturer Minimax Viking repriced its $1 billion term loan due February 2032 from S+225 bps to S+175 bps via Deutsche Bank, while financial exchanges firm OSTTRA repriced its $1.3 billion loan due May 2032 from S+325 bps to S+300 bps via Barclays.

Although refinancings led the way, a handful of new-money deals kept pace. System One is marketing a $550 million seven-year first lien TLB via Truist to back its acquisition by Oaktree Capital Management and StepStone. The loan is talked at S+375 bps with 99.5 OID and commitments are due Aug. 12. Moody’s Ratings noted pro forma leverage of roughly 5x and expectations that the outsourced technical services provider will generate roughly $40 million in free cash flow over the next year.

Hardware products maker Hillman Solutions Corp. is also in the market with a $200 million fungible incremental first lien term loan via Jefferies to fund its $315 million acquisition of Kanebridge Corp. The deal, talked at S+200 bps and 99.5 OID, has commitments due Aug. 12.

Meanwhile, membership-based healthcare provider MDVIP priced a $215 million fungible incremental TLB at S+275 bps and 99.5 OID via Goldman Sachs, to fund a shareholder dividend for sponsors Charlesbank Capital Partners and Goldman Sachs Asset Management.

With refinancings, repricings and a steady stream of new-money deals, the market is showing little indication of the traditional August slowdown so far.

For more information on potential deal activity, see Octus’ Deal Origination Pipeline.
 

Issuance by Use of Proceeds, Ex-Repricings

Issuance by use of proceeds for both loans and bonds but excluding repricings as of Aug. 6 is shown in the charts below. For year-over-year comparisons, Octus provides data for the last 14 months.
 

Pricing by Rating

Average spreads and coupons for loans and bonds, respectively, by ratings band as of Aug. 6 are detailed in the charts below. Because of the limited activity of CCC rated issuance, only the months with issuance are shown.

Pricing by ratings category is shown below:
 

The average price of Brightspeed’s $2.4 billion senior secured term loan has sunk to 68 from 83 three months ago, as the company’s persistent cash burn could lead to a potential debt restructuring, Octus reported this week. The Apollo Global Management-backed broadband provider, which has about $8.5 billion in net debt, has been burning cash to build out a fiber optic network.

Top daily loan decliners and risers can be found in Octus’ Credit Cloud. A search for the largest bond decliners is HERE.

Average high-yield bond spreads sit at 275 bps, according to ICE BofA data. The LSTA Leveraged Loan Index was indicated at 97.02, up slightly from last week.

Moody’s Ratings and S&P Global Ratings downgraded the following companies this week:
 

• Hughes Satellite Systems Corp.
• ADMI Corp.
• CDK Global
   

The Octus Covenants analyses of the documentation for new loan transactions can be found HERE.

Octus’ Private Company Analysis recent reports can be found HERE.

Octus’ Fundamentals Coverage Weekly Update highlights new-issuer coverage in Fundamentals for the syndicated credit universe, alongside transcripts for syndication calls.