Dayco’s loans have caught a bid after the company reported strong free cash flow generation for FY21, even as EBITDA and revenue trended lower, according to two sources familiar with the company.
During the fiscal year ended 28 February, the company clamped down on working capital and capex spend, resulting in a material improvement in cash flow, both sources said. The company generated USD 832m of revenue, down from 964m in the prior-year period, said the sources.
Adjusted EBITDA totaled USD 103m, compared to USD 108m in fiscal year 2020, said both sources. At fiscal year’s end, liquidity totaled USD 144m, split between USD 138m of cash and USD 6m of revolver availability.
Net total leverage amounts to 4.1x through USD 562m of total debt.
The USD 475m Libor+ 425bps notes due 2023 were quoted today at 94.063/96.313, compared to trades at 90.5/92.542 on 19 May before the earnings report, according to Markit.
Dayco declined to comment. Sixth Street, Anchorage and Oaktree did not respond to requests for comment.