Fewer, but Bigger Leveraged Loan Deals in Europe

Despite an ‘accommodative monetary policy’ from the European Central Bank (ECB), leveraged loan allocations in Europe during the first quarter of 2015 were down 7% year-on-year (YoY) to €23bn, reports Debtwire.

However, in its report the real-time news and data publisher adds that deal volume in Q115 also declined, to 37 from 45 a year earlier, which meant the average deal size of €623m was 13% higher YoY.

By industry, pharmaceutical companies allocated most funds at €5.9bn in Q115, up 6.1x times YoY. The sharp rise was mainly on the back of Valeant Pharmaceuticals’ €4.9bn-equivalent package. This funded the loan portion of the Quebec, Canada-based multinational’s takeover of US rival Salix Pharmaceuticals, which was first announced in February and completed the following month.

Chemicals and materials groups also featured prominently during the first quarter, raising around €2.9bn via five deals against only €619m in Q115. Ineos, headquartered in Switzerland, came to the market in March to bring down its cost of funding, replacing existing US$1bn 8.375% senior secured notes and €500m senior secured floating-rate notes (FRNs) with a €1.4bn-equivalent dual-currency term loan B (TLB) paying a margin of 3.25%.

Swiss companies allocated €4.7bn in Q115 via three large deals, almost 10 times above last year’s figure. They were led by the carton packaging manufacturer SIG Combibloc’s €2.3bn covenant-lite leveraged buy-out (LBO) package – a deal first announced last November – which funded the company’s takeover by Onex Partners.

The other two players were Ineos and telecom group Sunrise Communications, which signed a €949m deal refinancing the company’s IPO loan in February.


Related reading