After a quieter-than-expected post-Easter week, there was a steady pace of new transactions across leveraged loans and high yield, with some particularly chunky deals that span both markets.

Asda came to market seeking a refinancing of its €1.05bn TLB due 2031 (price talks are at E+400-425bps at 99.5) with a £1.75bn bond sale to follow, a transaction that’s getting positive reception despite recent noise around the Issa brothers in the press. Bloomberg reported that Zuber Issa is in talks to offload his 22.5% share in Asda to fellow-owner TDR Capital earlier this month.

“Leverage is reasonable and performance good. It’s generating cash and a stronger business following the EG acquisition,” said a buysider.

While the sterling part of the deal is partially due to Asda’s UK exposure, it’s also indicative of sterling making a small, but notable, comeback — for the right issuer.

“High yield sterling is more supportive, you see that with Asda coming with [a lot of] sterling bonds” said a banker. “But Asda is a strong well-liked credit, especially after the EG transaction.”

“If it were a new money deal, I’d be wondering about the strength of the sterling bond market, but because it’s a refinancing, I don’t see any problems,” said an existing Asda investor.

Motel One is another sizable transaction launched this week. The German hotel operator is in the market seeking a €800m TLB alongside €500m of SSNs. Price talks on the TLB are at E+450-475bps at 99.

“The market appears relatively healthy,” said a second buysider. “There have been a few idiosyncratic risks with Altice but the CLO machine is printing. So there doesn't seem to be any change in the mood. Loans are looking directly through the war in the Middle East to carry on as usual.”

And while the near-term pipeline is expected to keep the market busy, it’s primarily refinancings, repricings and A&Es in the mix — new money is still elusive.

“We’d love to see more new money transactions — investors would too,” said a sellsider. “We’ve seen some green shoots in the LBO market but we need more.”

Bankers speaking with 9fin expect Q2 issuances to be roughly on par with Q1, in which €44.9bn of euro TLBs and €24bn of European high yield priced. (Read 9fin’s Q1 loans and bonds round up here and here.) There are over 40 deals in the near-term pipeline, sources said, the majority of which is refinancing focused — including more private credit to BSL refis. (See some of 9fin’s candidates.)

“We have a couple of M&A names coming in Q2 but you’re counting on one hand those kind of deals,” said a second banker.

Deals to come include an e-learning company bond deal, a media refinancing, as well as a loan from a pan-European healthcare firm (and you can find out more of what’s to come in our latest pipeline report).

Meanwhile as expectations of interest rate cuts continue to fall in the US and Europe, some see a continued high rate environment as favouring the loan market. “We believe the higher carry from floating coupons and strong technicals will continue to bolster loan returns in 2024,” noted Barclays in a research report.

High yield

Fund flows also seemed to support the idea that the bond market may be losing its shine.

The seven day period ending 24 April saw inflows to European investment grade (€-IG) but continued outflows from pan-European high yield (PE HY) funds, according to Barclays Research. This was the second consecutive week of outflows after a strong quarter inflows for PE HY.

However, the impacts haven’t yet been felt in deal flow. “In the grand scheme of things, spreads are very low still despite all geopolitical noise,” countered the sellsider. “Issuing bonds can be cheaper than loans these days due to technicals.”

In addition to the upwards of £2bn bonds coming between Asda and Motel One, there were a number of notable transactions launched and priced this week.

Italian private label products maker La Doria just announced it’s seeking €500m in senior secured FRNs, which includes a €125m distribution to shareholders.

German automotive parts manufacturer Mahle priced its €500m of SUNs at 6.5% and 100, while French automotive equipment manufacturer Forvia priced €200m of senior notes at 5.5% and breached par at 101.75.

French telecoms company Iliad priced €500m of 2031 SUNs at 5.375%, at the tight end of price talks which ranged from 5.375-5.5%.

Ion Corporates priced its $830m dual-tranche SSNs, including €300m SSNs due 2029 which priced 7.875% at 100 as well as $500m SSNs due 2029 which priced 8.75% at 100.

However, expect a slowdown to come. “Next month will be lighter in terms of bond issuance as numbers go stale and the bank holidays disrupt the calendar,” a third banker told us in our pipeline report.

Weekly high yield movers

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Leveraged loans

Meanwhile the leveraged loan market was finally back to the races with a herd of new deals after a quiet few weeks.

Parques Reunidos, the Spanish leisure park operator, is out with a €1.22bn A&E, extending maturities from September 2026 to September 2029. Price talk is at E+450bps at 99.

The company was last in market in December 2022, when a slim €225m add-on refinancing pandemic debt and RCF drawings overcame initial buysider scepticism on this “highly seasonal” name.

Swedish security systems supplier Verisure is also out seeking an A&E — 9fin predicted this deal back in January. Alongside other senior secured debt to come, it is seeking a minimum €500m TLB to refinance its existing TLB due July 2026, pushing the maturities to May 2030. Price talks are at E+350-375bps at 99.5.

House of HR, a Belgium-based a provider of HR services, is aiming to reprice €1.27bn (upsized from €1.17bn) TLB, which could grow further by delayed draw term loan conversions. The upsize will be used to refinance existing debt, including DDTL repayments and/or a second lien tender. The repricing is from E+550bps to E+500bps at par (revised from 99.75-par) OID.

Notably it includes the ability to convert existing holdings of the €125m non-fungible DDTL into the new repriced TLB facility at equivalent economics. For more on this, we did a deep dive into how the market is responding to the uptick in DDTL facilities.

Isle of Man-based online gaming company Entain was out with a repricing as well, seeking to lower the margin on its €1.03bn TLB due 2028 from E+375bps to E+350bps, as well as its $1.76bn TLB due 2029 from S+350bps to S+275bps. The deal includes a £600m-equivalent add-on for general corporate purposes, with the euro price talks at E+350bps at 99.5-99.75 (0% floor) and dollar price talks at S+275bps at 99.5-99.75 (.5% floor).

“It’s one of the strongest names in my portfolio,” said one lender this week. The credit — which includes the brands Ladbrokes and Coral — boasts a royal flush of low leverage, geographical diversification, online sector tailwinds and ongoing expansion, three other existing lenders told 9fin back in June, despite ESG concerns from some funds.

Meanwhile, some of the smaller and more complex deals from last week priced with a premium for investors.

Sulo, the French maker of waste bin products, priced its €350m TLB at E+500bps at 98.5. Investors struggled with the small size — an emerging theme as the private credit to broadly syndicated refinancing trend continues.

“We’ve binned this one — it’s just too small for us to consider. That’s been a bit of an issue with all these unitranche refinancings, a lot of these businesses are just on the slim side,” a buysider told us.

Meanwhile, UK catering services company WSH priced its £589m TLB A&E, extending maturities to 2031, at S+550bps and 99.5, tighter than price talks which offered 98-98.5 OID — indicating that there is an appetite, even if small, for sterling TLBs. As buysiders told 9fin: “It’s just a small UK business and we don’t have a home for the sterling exposure anymore.”

Dutch pharmaceutical company Centrient priced the A&E of its €515m TLB at E+525bp at 98.5, right at the level of price talks. The transaction pushed the company’s first lien TLB from October 2025 to October 2027, its second lien TLB due October 2026 to March 2028 and the RCF to May 2027.

The deal came on the back of a difficult year centring on its troubled acquisition of Astral Steritech — there were several recalls for Astral Steritech’s products due to quality control issues, as Moody’s writes. While Centrient has moved Astral into an unrestricted subsidiary to protect itself from the ramifications of this, new lenders told 9fin they were still getting comfortable with the link between the two companies. See more here.

Finally, US-based automotive tech company Keyloop priced a €70m TLB fungible add-on to finance its acquisition of Automotive Transportation Group at E+400bps at 100.

Weekly leveraged loan movers

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Forward pipeline

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