Luke M

Journalist at LevFin Insights, covering leveraged finance. Views my own.

[Luke M @millarlr]

@derimster @CavaggioniMario Has a bespoke and issuer friendly covenant package too (courtesy of my colleagues at Covenant Review), which feels odd for a chems company to push envelope on covs. Makes getting that EBITDA number up even more useful for the borrower.

[Luke M @millarlr]

@CavaggioniMario Yes, very unusual for IPTs to not be out yet, especially as they guided the loans on day1. We hear low-6% was envisaged last week but now likely to be m6% maybe even h6%. Softer backdrop hasn't helped but concerns over FCF & Wyre outside RG were always going to make deal tricky

[Luke M @millarlr]

@CavaggioniMario Agreed. We have 27 bonds issued in January, 11 finished the month below re-offer, while only 5 were up over half a point. This was a theme all last year too as accounts chase paper in primary wanting size, NIP gets squeezed out so no follow-on demand for 1m and 2m clips on break

[Luke M @millarlr]

@CavaggioniMario Agreed. Eye catching too how thin the spread between BBBs and BBs is. IG buyers not being paid to come down in quality.

[Luke M @millarlr]

@CavaggioniMario I have just started looking at the deal but I can't get past the first line in the OM - "We are a leading ocean solutions provider"

What on earth is an ocean solutions provider?!

[Luke M @millarlr]

@derimster @CavaggioniMario I had 3.7% as YTM, but maybe I was wrong. Makes more sense what you are saying as company not renowned for offering a NIP!

[Luke M @millarlr]

@CavaggioniMario Given Matter has outstanding 4.5% Jan 2030 secureds that were at ~3.7% yesterday, is FV not a little below 4% to adjust for the eight month extension?

[Luke M @millarlr]

Ithaca Energy issuing first € bond as cheaper that issuing $ and swapping to euro. My basic maths has € at 5.75%, a $ deal likely at 7%, which swaps to 5.75% in euro + cost of swap line. Reverse yankee not for everyone though as ZF and Forvia both issuing $ to refi €

[Luke M @millarlr]

@KillinGswitCH98 @CavaggioniMario They are pricing pretty tight, especially given the backdrop of rising govt yields!

[Luke M @millarlr]

@CavaggioniMario When comes to refis of challenged credits, market shows can be nimble with bespoke features. Large OID keeps cash-pay debt down but all-in yield still attractive. 2.5pts opens door to private credit. Asset disposal redemption feature & NC period both tailored to entice investors

[Luke M @millarlr]

@CavaggioniMario Yes. € 2028s and 2029s trade broadly on top of each other at ~5.6%. Most new issues this yr have started with high IPTs & then slashed from there, typically by 50bps.

[Luke M @millarlr]

ELFA appoint Ed Eyerman as CEO, replacing Sabrina Fox who announced her resignation last year. A good hire for ELFA.

[Luke M @millarlr]

@CavaggioniMario Using proceeds to fund 10% at 103 is savvy from the banks/issuer. I imagine that as coupons in last 2yrs have tended to be 6%-plus, that 10% at 103 feature will be used more often as can chip away at debt cheaper than the first call. Funding with fresh lower cpn debt too now!

[Luke M @millarlr]

IRCA was set to reprice its unitranche by 150bps in the summer, from E+725. Instead it started work on a bond refinancing and just priced it at E+375bps. Going down the bond route (well term loan in bond clothing) just saved them 350bps, or 200bps more than a unitranche reprice

[Luke M @millarlr]

HY primary still px tight but there's teensy bit of px discipline. Iliad, TUI Cruises, and B&M all came with little-to-no NIP. Some px on top of shorter dated debt. All then sluggish/inert in 2ndry. BUT investors did draw a line with 2 not pricing at tight-end of final guidance

[Luke M @millarlr]

Barings becomes the first manager to issue a European mid-market CLO, via BNPP. Static deal with a 1Y NC period. €380mn deal. Rated by Fitch and S&P.

[BBC Newsnight @BBCNewsnight]

“So it’s not about you, it’s not about your farm and the fact you bought a farm to avoid inheritance tax?”

@vicderbyshire speaks to Jeremy Clarkson at the farmers’ protest in Westminster where thousands of farmers are protesting the government’s inheritance tax plans.

[Luke M @millarlr]

@CavaggioniMario I think they are not callable till six months from maturity, at par. That's the end of 2025. Paying the MWC would be quite punitive on top of increasing the coupon from 2.625%.

[Luke M @millarlr]

@CavaggioniMario Given it was the first deal in weeks to offer a sizeable new issue premium, I'm a little surprised it hasn't held its ~half point gain on the break. Tough deal but normally close to 10% unlocks more demand

[Luke M @millarlr]

@CavaggioniMario New issues since start of Sept have largely not performed very well/at all. Despite book sizes apparently being strong, deals pricing to perfection meaning little follow-on demand. Either a macro event will reprice the market or a new issue will push it too far. Normally the case