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Aventiv and creditors plot next steps after refi fails

Aventiv Technologies is back at the drawing board with its lenders after efforts to refinance near-term maturities – borrowed under subsidiary Securus Technologies – were met with lackluster interest, according to two sources familiar with the matter.

After months of marketing and negotiations, the Platinum Equity-owned prison telecommunications company quietly pulled its proposed refinancing deal earlier this month, causing quotes on its term loan to plummet to 80/84.5 on 7 July, from an 88.972/91.472 context earlier that week, the sources said. The USD 1.087bn Libor+ 450bps first lien term loan due 2024 was last quoted 79.947/82.475, according to Markit.

Discussions between the sponsor and lenders are still ongoing but have yet to show material progress, the sources added.

The initially proposed transaction led by Deutsche Bank comprised a four-year USD 700m first lien term loan guided at SOFR+ 600bps and a 97 OID, alongside a four-year USD 400m senior secured note offering carrying a roughly 11% yield. Proceeds were earmarked to repay the borrower’s existing USD 1.087bn first lien term loan due 2024 and USD 282.5m second lien term loan due 2025.

To bolster investor confidence and hopefully get the deal across the finish line, Platinum pledged to write an additional USD 400m equity check to support the company, on top of the roughly USD 440m it had invested previously. Despite the seemingly attractive terms, the deal failed to garner sufficient interest from investors and the deadline for commitments on the TL portion was not extended past the initial 12 May cut-off, the sources said.

Its USD 282.5m L+ 825bps second lien term loan due 2025 was last quoted 77/82.844 today, roughly unchanged from early this month.

Representatives from Securus and Platinum did not respond to requests for comment.