US LevFin Wrap — Everything you need to know for next week, in 5 minutes

Sasha Padbidri

31 August 2023•5 min read

We’ll keep this wrap brief, as it’s the Friday before a long weekend.

The post-Labor Day pipeline is already looking pretty full, with more than $20bn of deals gearing up to launch this month alone. Among them is Syneos Health’s buyout debt, where the bonds are receiving good feedback during premarketing at pricing in the low 9% area.

Here’s our roundup of all the other issuance that is set to hit the market starting in September. If you’re heading out of town for the long weekend, check out this week’s episode of our Cloud 9fin podcast for an audio version.

Some other highlights from this week:

Private credit funds might have to rethink the way they structure ‘season and sell’ investments with foreign LPs, if the IRS wins its lawsuit against YA Global
Hurricane Idalia caused less damage than feared when it hit Florida earlier this week, but extreme weather isn’t going away — check out our article on leveraged companies with hurricane exposure
If you’re wondering where all those Credit Suisse bankers are ending up, you’re not alone — we were too, so we published an update to our July list of who’s going where after the UBS merger
The Great Resignation is being replaced by The Big Stay — see our coverage of how leveraged credits are adapting to changes in labor trends

By the numbers

Speaking of labor, two privately held companies we covered this week benefitted from the cooling job market in the second quarter.

Home care company Sevita reported strong earnings growth, largely thanks to falling labor costs. This is becoming a strong trend in the healthcare sector, where providers had previous been struggling with staffing shortages that forced them to hire expensive contract workers.

Different sector, but somewhat similar story: Whatabrands, perhaps better known as Whataburger, posted a bumper set of second quarter earnings. Alongside falling commodity costs and rising sales, falling labor costs were a big factor in the company’s strong performance.

Elsewhere in earnings:

Portable toilet company United Site Services posted better earnings for the second quarter but declined to take questions from investors. The company’s sponsor Platinum Equity is attempting to turn things around after firing the CEO and CFO earlier this year.
Pressure is mounting on SK Capital to inject cash into speciality chemicals company SI Group, after the company posted a big decline in EBITDA for the second quarter. The business has been hit hard by the de-stocking trend and by falling demand in China.
Viking Cruises reported a huge jump in 2Q revenue as post-pandemic travel demand rebounds. The company is close to filling its reservations for next year despite hiking prices by 16%.

CLOs are go-go-go

The structured credit market has been busy ahead of the holiday, with at least four deals pricing this week. That should provide plenty of fuel for upcoming primary issuance.

Octagon Credit Investors went alternative, pricing a CLO with more significantly more distressed loans than its usual broadly syndicated deals. Around 15% of the loans in its portfolio trade below 90, while a “decent amount” trade below 80.

MCCP Investment Partners chose this week to issue its first US vehicle, becoming the sixth firm to make its BSL debut this year. Elsewhere, Bank of America reworked two expensive deals from last year, and BlackRock celebrated its tightest triple-A print of the year so far.

Speaking of debuts, CIFC Asset Management priced its first mid-market CLO this week, through LBC Credit Partners.

Finally, check out our latest 9Questions interview with Joshua Liebow and Matt Szwarc of Manulife Investment Management. They explain why a growing number of PE firms are considering mezzanine financing solutions in an uncertain macro environment.