International Financing Review September 8 2018 79LOANS LEVERAGED LOANS
It has been part of Micro Focus since 2014,
when the British company acquired The
Attachmate Group for US$2.35bn.SIG SEEKS REFI AHEAD OF IPOSwiss packaging maker SIG COMBIBLOC has
launched a €350m Term Loan B refinancing
after announcing its intention to list on
Tuesday.
The covenant-lite seven-year loan will,
alongside a new Term Loan A and the IPO,
repay all outstanding debt.
The Ba3/BB+ rated loan is guided at 275bp-
300bp over Euribor, offered at 99.5 with a 0%
floor and six months of soft call protection
at 101.
SIG did not give a specific date for the IPO,
which sources have told Reuters would
value the company at about €5bn.
Canadian private equity firm Onex -
majority owner since 2015 - and SIG
management may also sell existing shares,
although Onex will retain at least 50% with
a “market-typical lock-up” following the
IPO, according to Reuters.
SIG plans to cut debt to about €1.5bn, or
3-3.25 times Ebitda of €480m, from about
€2.5bn now.
The company was previously listed until
2007 as part of the Schweizerische Industrie
Gesellschaft (SIG) conglomerate.
Next year, SIG expects to pay a dividend
of approximately €100m. From 2019
onwards, it plans a pay-out ratio of between
50% and 60% of adjusted net income.
Bank of America Merrill Lynch, Credit Suisse and
Goldman Sachs are global coordinators for
both the loan deal and the prospective IPO.CIRCET SEEKS ADD-ONFrench telecom network service provider
CIRCET GROUPE has launched a €150m Term
Loan B add-on backing its acquisition of
Irish peer KN Group.
UBS and NatWest Markets are physical
bookrunners, with Deutsche Bank as joint
bookrunner.
The deal comes after KN Group appointed
advisers earlier this year for a potential sale
of the business. Champion Irish rally driver
Donagh Kelly owns a 60% stake in the group.
The deal follows Circet’s issuance of a
€570m Term Loan B in March backing
Advent’s buyout of the business from CM-
CIC Investissement. That facility priced at
375bp over Euribor with a 0% floor after
undergoing several documentation changes
following a lukewarm investor reception.INCUS RAISES €500m FOR CREDIT FUNDMadrid-headquartered credit investment
firm INCUS CAPITAL has raised €500m for itsthird speciality credit fund. Incus invests in
both the primary and secondary loan
market and is focused on asset-backed
investments in Europe, aiming for mid-teen
returns on deals ranging between €50m and
€100m.
The firm, which began its roots investing
in Spain and Portugal, has since expanded
its geographic remit to France and Italy, and
recently completed a €50m investment in
France - the first deal in the latest fund.
Incus opened a Paris office last year and
recently appointed Corrado Giovanelli,
previously head of global market sales at
Credit Suisse in Milan, as a managing
director in the firm’s Italy base.
“We’re a cheaper alternative to private
equity and more flexible than the banks,”
said Martin Pommier, partner at Incus.
“We look at deals too small for the
London or New York-based funds and
too big for family offices. We’re in a
space with a lot less competition,”
he said.
The final sum is almost double the
previous fundraising total of €270m reached
in 2016. It has a three-year investment
period.More than half of the investors in the
fund were from North America, while the
rest came from Europe-based investors. The
firm has partnered with Canadian pension
plan Ontario Teachers’ Pension Plan on co-
investments in the past.
Speciality credit strategies have seen
increased attention from investors familiar
with private credit but are now seeking
higher returns.
Assets managed by private debt funds
reached US$687m this year, according to
Preqin, a record high for a market that
continues to raise huge sums of cash.
But the increasing amount of capital
committed to the asset class has contributed
to the erosion in the liquidity premium of
unitranche funds, a Willis Towers Watson
report found.
“Over the last few I’ve spent time educating
investors in speciality credit, but many were
just starting in private credit,” Pommier said.
“But for most investors now they have
filled the direct lending bucket. We’re a
complement to that exposure and an
alternative to private equity investments.
But we imposed a hard cap because it was
important we didn’t over-raise,” he said.Investor push-back in
leveraged market increases
n EUROPE Report says some 89% of deals this year have seen changes on prices
Investors in the leveraged loan market are seeing
an increasing number of concessions on pricing
and documentation this year compared with
2017 with the battle also drifting into previously
less-heated areas of negotiations.
Some 89% of deals have seen changes on
prices this year, up from 77% in 2016, according
to a report from Debt Explained.
An average of 6.1 changes have been made
on loan terms during the syndication process, up
from 3.33 in the second half of 2017 and 1.6 in the
half-year period before that, Debt Explained said.
Deals led by private equity sponsors have
seen a higher number of changes compared
with corporate borrowers, averaging 6.65 to 4
changes, respectively.
“It is clear that some deals are pushing the
boundaries,” the report said.
Over the summer a number of deals saw
investors push-back on terms.
Pricing on German metering business
TECHEM’s €2.34bn term loan B flexed higher
during syndication, while French roofing business
IMERYS and UK recruiter ALEXANDER MANN offered
deep discounts for the deals to clear the market.
Finnish healthcare company MEHILAINENconceded a number of document changes
on its €1.1bn debt package and satellite
communications company MARLINK dropped a
loan funding a dividend recap.
Such a rebalancing in the market has come
as jumbo loans funding buyouts of REFINITIV,
Thomson Reuters’ Financial and Risk unit, which
includes IFR, and AKZO NOBEL’s chemicals unit
come to the market, soaking up demand. Both
deals were launched for syndication last week.
But push-back from investors has also been
seen in what has historically been the least
contentious areas of negotiations.
“While the major focus of the changes in
syndication we have seen in 2018 has been in
the traditional battlegrounds of pricing, debt
capacity and restricted payments, we are also
seeing investor push-back in areas which have
previously been less contentious such as pre-
payments and transfers,” the report said.
Of the most highly negotiated changes this
year, tracked by Debt Explained, debt cap,
MFN protection and margin ratchets were the
top three, while synergies and excess cashflow
sweeps made up the top five.
David Brooke9 Loans 2250 p67-80.indd 79 07/09/2018 18:55:12