MARGINûOFûBPûOVERû,IBOR ûUPûFROMûANû
INITIALûBPû4HEû/)$ûWASûWIDENEDûFROMû
ûTOûûANDûTHEûûmOORûWASû
UNCHANGED
3OFTûCALLûPROTECTIONûWASûEXTENDEDûFROMû
SIXûMONTHSûTOûûMONTHSûANDûDROPPEDûTHEû
SUNSETûCLAUSEûFROMûTHEûMOSTûFAVOUREDû
NATIONSûPROVISION ûWHICHûISûBP
0ROCEEDSûWILLûBEûPAIDûTOWARDSûSENIORû
SECUREDûNOTESûPRICEDûATûûANDûDUEûINû
JP Morgan ARRANGEDûTHEûLOAN ûALONGSIDEû
BNP Paribas ûGoldman Sachs ûBarclays û
Citigroup ûCredit Agricole ûCredit Suisse û
Deutsche Bank ûING ûMorgan Stanley and RBC
4HEûEXISTINGûFACILITYûHASû""ûCORPORATEû
RATINGSûANDû""ûFACILITYûRATINGS
&OLLOWINGûTHEûTRANSACTION ûTHEûCOMPANYû
SAIDûTHEûAVERAGEûMATURITYûOFûITSûOVERALLûDEBTû
PROlLEûFORûTHEû&RENCHûDIVISIONûWASûEXTENDEDû
TOûûYEARSûFROMûûYEARSûANDûTHEûWEIGHTEDû
AVERAGEûCOSTûOFûTHEûDEBTûSTANDSûATû
&ORûTHEûENTIREû%UROPEANûDIVISIONûAVERAGEû
MATURITYûISûûYEARSûANDûDEBTûCOSTûISû
4HEû&RENCHûBORROWERSûAREû9PSOû&RANCEû
ANDû!LTICEû&RANCE ûANDûTHEû53ûBORROWERûISû
.UMERICABLEû53
SIVANTOS, WIDEX MERGER LOAN NEARS#OMMITMENTSûWEREûDUEûONû&RIDAYûFORûTHEû
DEBTûBACKINGûHEARINGûAIDûMAKERûSIVANTOSû
MERGERûWITHû7IDEX
4HEûlNANCINGûCOMPRISESûAûõBNûSEVEN
YEARû4ERMû,OANû"ûANDûAû53BNûSEVEN
YEARû
4ERMû,OANû"
0RICINGûFORûTHEûEUROûTRANCHEûWASûGUIDEDûATû
BP
BPûOVERû%URIBORûWITHûAûûmOORû
ANDûAûû/)$û4HEûDEALûINCLUDESûûSOFTû
CALLûPROTECTIONûFORûSIXûMONTHS
4HEûDOLLARûTRANCHEûWASûGUIDEDûATûBP
BPû
OVERû,IBORûWITHûAûûmOORûANDûAûû/)$û)Tû
INCLUDESûûSOFTûCALLûPROTECTIONûFORûSIXûMONTHSû
4HEREûISûAûBPûPRICINGûSTEP
DOWNûWHENûSENIORû
SECUREDûNETûLEVERAGEûISûATûûTIMES
Deutsche Bank WASûLEADINGûTHEûEURO
DENOMINATEDûLOANûANDûJP Morgan WASûLEADINGû
THEûDOLLARûTRANCHE
#ORPORATEûRATINGSûAREû"" ûANDûFACILITYû
RATINGSûAREû"" ASIA-PACIFIC
QUADRANT RAISES JAG LBO UNITRANCHEQUADRANT PRIVATE EQUITYûISûRAISINGû!Mû
53M ûFROMûAûUNITRANCHEûLOANûFORûITSû
PURCHASEûOFûAûMAJORITYûSTAKEûINû!USTRALIANû
BEFORE
AND
AFTER
SCHOOLûCAREûPROVIDERû*UNIORû
!DVENTURESû'ROUP
Credit Suisse and NomuraûHAVEûEQUALLYû
UNDERWRITTENûTHEûSIX
YEARûSECUREDû
BORROWING ûWHICHûISûSPLITûINTOûAû!Mû
TERMûLOANûANDûAû!MûSUPER
SENIORû
REVOLVINGûCREDITûFACILITY
4HEûLEVERAGEûMULTIPLEûONûTHEû
BORROWINGûISûMOREûTHANûlVEûTIMES ûWHILEû
THEûINTERESTûMARGINûISûBPûOVERû""39û
4HEû/)$ûISû
4HEûUNITRANCHEûlNANCINGûISûTHEûlRSTû
SUCHûLOANûFORûAûLEVERAGEDûBUYOUTûTOûBEû
SYNDICATEDûANDûTHEûFOURTHûSINCEûTHEû
ADVENTûOFûTHEûSTRUCTUREûINû!USTRALIAûLASTû
!UGUSTû0REVIOUSûUNITRANCHEûLOANSûHAVEûBEENûLARGELYûCLOSEDûASûBILATERALûORûCLUBû
DEALS
4HEûLASTûSUCHûLOANûWASûINû/CTOBERû
WHENû0%ûlRMû40'û#APITALûCLOSEDûAû
!MûSIX
YEARûUNITRANCHEûFORûITSû
ACQUISITIONûOFûAûMAJORITYûSTAKEûINûCLINICALû
TRIALSûlRMû.OVOTECHû"ARINGS û.OMURAû
ANDû0ARTNERSû'ROUPûFUNDEDûTHEû
UNITRANCHE ûWHICHûALSOûINCLUDEDûAû!Mû
SUPER
SENIORûREVOLVERûPROVIDEDûBYû(3"#û
4HEûDEALûCARRIEDûLEVERAGEûOFûûTIMESû
%BITDAûANDûAûMARGINûINûTHEûLOWûSûOVERû
""39
4HEûTHREEûPROVIDERSûOFûTHEûUNITRANCHEû
FORû.OVOTECHûHADûALSOûPREVIOUSLYûCLOSEDûAû
!MûSIX
YEARûUNITRANCHEûFORû++2ûû
#OSûACQUISITIONûOFû,ASERû#LINICSû!USTRALIA û
WITHû.ATIONALû!USTRALIAû"ANKûPROVIDINGûAû
!MûSUPER
SENIORûREVOLVER
&ORû*!' ûTHEûUNITRANCHEûlRSTûEMERGEDû
ASûAûSTAPLEDûlNANCINGûTHATû#REDITû3UISSEû
HADûPROVIDEDûINûITSûROLEûASûSELLSIDEûADVISERû
TOû!DVENTû0ARTNERS ûWHICHûCONTINUESûTOû
REMAINûINVESTEDûINû*!'ûAFTERûSELLINGû
DOWNûPARTûOFûITSûCONTROLLINGûSTAKEûTOû
1UADRANTû4HEûDEALûISûSAIDûTOûHAVEûBEENû
VALUEDûATûMOREûTHANû!M
)Nû*UNEûLASTûYEAR û0%ûGIANTû"AINû#APITALû
HADûPROPOSEDûTOûMERGEû*!'ûWITHû
ANOTHERûAFTER
SCHOOLûCAREûPROVIDER û
#AMPû!USTRALIAû(OWEVER ûINû/CTOBER û
THEûMERGERûWASûSCRAPPEDûDUEûTOûISSUESû
RAISEDûBYû!USTRALIASûANTITRUSTûREGULATOR û
FOLLOWINGûWHICHûAû!Mû4ERMû,OANû"û
WASûCANCELLEDû4HEûlNANCINGûHADûBEENû
WELLûADVANCEDûWITHûALLOCATIONSû
COMPLETED ûBUTû"AINûABORTEDûTHEûMERGERûLev loans debt instrument of choice for M&A
EUROPE Market’s lack of volatility has made it more attractiveLeveraged loans continue to be the preferred
debt instrument for funding M&A in the
leveraged finance market and issuance outpaced
high-yield bonds in June as private equity firms
opt for the greater flexibility offered by the
private product.
In June, US$10.5bn of loans were issued, 86%
of which financed private equity-backed M&A
activity, compared with only 13% for refinancing,
according to Moody’s. Two-thirds of bond deals
refinanced existing debt and one-third was for
M&A in the same month.
Loan issuance has been stronger than bond
issuance in the two years since the second half of
2016 at US$286bn, 54% higher than US$186bn of
high-yield bond issuance, as loan documentation
has moved in line with the high-yield market with
the widespread adoption of covenant-lite lending.
“Loan documentation has mirrored bond
documentation over the last couple of years, itno longer generally has the covenant pressures
of the older style loans,” said Richard Etheridge,
associate managing director at Moody’s.
The loan market’s lack of volatility has also
been a big plus in a volatile month that has seen
the high-yield market under pressure.
“There is more certainty in the (loan) terms
and pricing because the loans are slower to react
than bonds to market volatility,” Etheridge said.
Total leverage loan issuance in the first six
months of 2018 has fallen short of 2017 figures,
with 20% less loan issuance than a year earlier
and the June total 47% lower than the same
period last year.
According to Moody’s the loan market is on
track to issue around US$230bn in total in 2017,
US$40bn short of last year’s US$270bn.
In June, seven first-time issuers came to the
loan market, including Finnish private healthcare
company MEHILAINEN and plastic packagingmanufacturer COVERIS RIGID, both financing
buyouts by private equity firms. In contrast just
one came to the bond market, according to the
ratings agency.
This trend towards more private transactions
has been further aided by the growth in direct
lending. With increasing liquidity, sponsors
now have the option of pre-placing second-lien
instruments with non-bank lenders.
Earlier this year, UK forecourt operator MFG
placed a £285m second-lien debt facility with
Partners Group and EQT’s buyout of DUNLOP
PROTECTIVE FOOTWEAR included subordinated
debt from Pemberton.
Belgium-based chemicals distribution group
AZELIS marketed a €1.1bn leveraged loan with
almost half - €460m-equivalent - across euros,
sterling and Canadian dollars that was already
pre-placed.
David Brooke