Global banks stuck with US$80 billion in unappealing M&A financing debt are trying new tactics to find buyers.
In the case of the private-equity buyout of Citrix Systems Inc., they’re cutting the debt into smaller pieces to attract a wider pool of investors. Euro debt is being added to some financing packages, as in the case of ETC Group’s takeover.
Banks are also looking at adding a US$500 million-equivalent leveraged loan denominated in euros. Depending on demand for the loans they’re selling, bankers may also be able to decrease the amount of debt they’ll need to hold to US$2.5 billion or even less. “In current market conditions, we have seen a number of deals where underwriters have altered the capital structure or terms to maximize liquidity,” said Nicholas Clark, a partner and co-head of the global leveraged finance group at law firm Allen & Overy. “Underwriters have sought to tighten terms up-front, in an attempt to address likely investor areas of focus on the docs.”
Some of the Morrison loans have been sold to Asian and commercial banks, as well as Pimco and other investors. Despite such efforts, the banks involved in this deal remain stuck with more than £1 billion in financing that they’ve yet to unload, showing the additional costs of M&A deals done in a market shunning risk.
Revlon Inc. told the judge overseeing its bankruptcy that shareholders don’t need a special, company-funded committee to represent them in the Chapter 11 case because there is no evidence the equity is worth anything Finland may provide a glimpse of investor appetite for risk-free debt on Tuesday with the first sovereign offering of the season, as a souring sentiment in global markets persistsChinese banks are employing unusual practices to inflate their loan volumes as they struggle to meet government demands to pump more credit into an economy beset by COVID lockdowns and a beleaguered property market.
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