ABN AMRO and Deutsche Bank bowed to pressure from institutional loan investors and increased the margin on the second lien piece of Wind’s €7.55bn LBO loan. In addition, investors will be paid a new 1% fee on commitments.
The €700m second lien loan now pays 625bp, up from 525bp at launch, while institutional investors were initially not offered fees. “We were concerned that the deal would break under par, but the addition of the upfront fees has given us more comfort. We’re looking at the deal favourably on the basis of that,” said a CLO manager, who had declined the deal before the concessions.
Much of the concern about the deal had focused on lack of familiarity with the sponsor. Naguib Sawiris, head of Egypt-based Orascom Telecom and of the Weather consortium buying Wind, is well known among emerging markets investors but unfamiliar to many European buyers. Moreover, some funds were worried about the Italian mobile sector, believing it to be over-mature and with little growth potential.
The arrangers hope the extra yield will enable them to close the institutional piece with the bank syndication this week. They added that the second lien pricing was always flexible and that many investors had been waiting for confirmation of Wind’s rating and half-year results, both of which emerged according to expectations last week.
Rating agency Standard & Poor’s has awarded Wind and its senior debt B+ ratings, with the second lien rated B, in line with Moody’s B1/B2 ratings.