June 8, 2023


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U.S. CREDIT WEEK AHEAD: Buyout Loans to Hit Market After Holiday

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A busy period for high-yield debt sales shows no signs of stopping in June, with bank meetings set for two leveraged buyout loans following the U.S. Memorial Day holiday.

Lender calls will be held Tuesday for cybersecurity software provider Proofpoint Inc.’s $2.6 billion term loan to finance its buyout by Thoma Bravo, and Protective Industrial Products Inc.’s $135 million term loan to help finance Odyssey Investment Partners’ buyout of the firm.

Investors continue to pour money into U.S. loan funds, adding $862 million of cash in the week ended May 26, according to Refinitiv Lipper. That’s the 20th consecutive week of gains.

The busiest May on record for junk bond sales wrapped up this week, with supply nearly hitting $47 billion. The junk bond calendar is so far quiet heading into June.

Junk Month

This May has been the busiest one on record for U.S. high-yield bond issuance

Source: Bloomberg

A potential ratings upgrade to investment-grade status may be in the cards for Dell Technologies Inc., which reported strong first quarter results and boosted its debt reduction target this week. Dell credit default swaps tightened 17 basis points on Friday as investors digested the news.

Within distressed debt, forbearance agreements expire for mall owner Washington Prime Group Inc. on June 2 — pending another extension — and for GTT Communications Inc. on Thursday, June 3. Trilogy International Partners also faces an expiration for its exchange of notes due 2022 June 3.