The covenant-lite seven-year loan is
GUIDEDûATûBP
BPûOVERû,IBORûWITHûAûû
mOORûANDûAûû/)$û4HEûDEALûINCLUDESûû
soft call protection for six months.
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MARGINûONûDAYSû
ûûONûDAYSû
ûANDû
ûOFûTHEûAPPLICABLEûMARGINûFROMûDAYû
4HEREûAREûCORPORATEûFAMILYûRATINGSûOFû"
" ûANDûFACILITYûRATINGSûOFû""
Bank of America Merrill Lynch, TD, Barclays,
BMO, CIBC, Citigroup, Deutsche Bank, RBC,
Scotia and US Bank are arranging the
lNANCING
"ROOKlELDûANDû&ORESTû#ITYûANNOUNCEDûTHEû
agreement in July in a transaction valued at
53BN
Network services provider SANDVINE is
MARKETINGûAû53MûLOANûTOûBACKûAû
dividend recapitalisation.
Jefferies is leading with UBS and Societe Generale.
4HEûlNANCINGûCOMPRISESûAû53Mû
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YEARûREVOLVINGûCREDITûFACILITYû!û
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privately placed.
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the administrative agent.
BASS PRO GROUP, which operates Bass Pro
3HOPS ûHASûLAUNCHEDûAûLOANûTOûRElNANCEû
preferred equity and pay a dividend.
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fungible add-on to an existing term loan that
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ISûGUIDEDûATû
There is a 25bp consent fee for existing
LENDERSû3OFTûCALLûPROTECTIONûOFûûWILLûBEû
refreshed for six months for the entire term
loan B.
JP Morgan is leading the deal.
The debt will be used, along with borrowings
under an asset-based loan and cash on hand, to
RElNANCEûAûPORTIONûOFûPREFERREDûEQUITY ûFUNDûAû
distribution to shareholders and pay related
fees and expenses.
4HEREûAREûEXISTINGû"A" ûCORPORATEû
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FORûTHATûTRANSACTIONûINCLUDEDûAû53BNû
TERMûLOANûTHATûPRICEDûATûBPûOVERû,IBORGFL SHOPS US$1.3bn TERM LOANEnvironmental services company GFL
ENVIRONMENTAL is in the market with a
53BNûADD
ONûTOûITSûTERMûLOANûDUEûINû-AYûûTOûSUPPORTûITSûMERGERûWITHû7ASTEû
Industries.
Barclays is leading with BMO and Royal Bank
of Canada.
The add-on is expected to be issued at a
DISCOUNTûINûTHEû
ûRANGEû4HEûDEBTûWILLû
be priced at the same level as the existing
LOAN ûWHICHûISûBPûOVERû,IBORûWITHûAûû
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existing debt with the close of the deal. In
-AY ûTHEûCOMPANYûTACKEDûONû53MûTOûITSû
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4HEûLOANûISûPRICEDûATûBPûOVERû,IBORûWITHûAû
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The combined companies will have an
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/NTARIOû4EACHERSû0ENSIONû0LANûANDûOTHERû
GFL shareholders are providing equity to
back the deal.
"#û0ARTNERS ûWITHû/400ûANDûOTHERS û
backed a recapitalisation for GFL in May.
#ONSTRUCTIONûCOMPANYûINFRASTRUCTURE &
ENERGY ALTERNATIVES set guidance on a
53MûLOANûTHATûWILLûlNANCEûTHEû
ACQUISITIONSûOFû#ONSOLIDATEDû
#ONSTRUCTIONû3OLUTIONSûANDû7ILLIAMû
#HARLESû#ONSTRUCTION
Jefferies leads with KeyBank.
4HEûTRANSACTIONûCOMPRISESûAû53Mû
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lVE
YEARûREVOLVINGûCREDITûFACILITY
Pricing on the term loan is expected in
THEûBP
BPûOVERû,IBORûRANGEûWITHûAûûFed policymakers warn on loosening terms
US This year, 73% of leveraged institutional market was cov-liteFederal Reserve policymakers are concerned
about loosening terms and standards in the US
leveraged loan market, according to minutes
from their September policy meeting.
Deal terms in the leveraged loan market
are consistently becoming more aggressive,
featuring high debt levels and loose terms, to
the chagrin of some market participants.
“Some participants commented about
the continued growth in leveraged loans, the
loosening of terms and standards on these
loans, or the growth of this activity in the non-
bank sector as reasons to remain mindful of
vulnerabilities and possible risks to financial
stability,” according to the minutes, which were
released on Wednesday.
More than US$585bn of US institutional
loans were arranged in the first three quarters
of the year, after a record US$923.8bn in all
of 2017. In 2007, at the height of the pre-crisis
buyout market, US$425.8bn of institutional
loans were arranged.
Leverage for buyouts increased to 6.94 timesin the third quarter, the highest level since the
same three-month period in 2014.
For Blackstone Group’s US$20bn purchase
of a 55% stake in Thomson Reuters’ Financial &
Risk business, renamed REFINITIV (which includes
IFR), leverage topped 7.0 times. Moody’s said
leverage was 7.6 times as of June 30 on the deal- one of the largest buyouts since the credit crisis
- while the private equity firm says total leverage
is 5.3 times after Ebitda adjustments.
Document terms have also loosened as
leverage increased. About 73% of the leveraged
institutional market in the first three quarters
was covenant-lite, according to LPC data.
STEPPING BACK
Regulators have gradually taken a more hands-
off approach to the market after updating
leveraged lending guidance in 2013, which was
treated by market participants as a de facto rule.
They characterised loans without full lender
protections as “aggressive,” said leverage of
more than 6.0 times “raises concerns”, and thatcompanies should be able to pay back at least
50% of total debt within five to seven years.
In September federal agencies including
the Fed and the Office of the Comptroller of
the Currency said guidance does not have the
force and effect of a law, which loan market
participants said could open the door to even
bigger and more highly leveraged buyout loans.
When questioned in September about
loosening restrictions on leveraged lending, Fed
Chairman Jerome Powell said the market had
evolved “significantly” since the crisis and that
banks take much less risk than they used to,
distributing loans and bonds rather than holding
them on their balance sheets.
“But it’s also true, and there’s significant
research on this, that excessive risk-taking in the
leveraged lending markets does have channels
for affecting the real economy,” he said following
last month’s Federal Open Market Committee
meeting according to a transcript. “We monitor
that carefully.”
Kristen Haunss