Dutch cable business Casema has redefined the market for European mezzanine with a €1bn tranche, shattering the previous record. The deal has been launched to syndication as part of a €4.35bn loan via joint bookrunners ABN AMRO, Credit Suisse, Goldman Sachs, ING and Morgan Stanley.
The deal’s full structure comprises a €500m seven-year term loan A at 212.5bp over Euribor, a €1.1bn eight-year term loan B at 250bp, a €1.1bn nine-year term loan C at 300bp, a €250m seven-year capex line at 212.5bp, a €150m seven-year revolver at 212.5bp, a €250m 9-1/2- year second-lien tranche at 475bp and the €1bn mezzanine piece, which pays 9.5% all-in, split between 4.5% cash and 5% PIK.
The leads are approaching JLAs in the first instance before a general phase later in the year. A bank meeting has been scheduled for Tuesday 19 September at the Savoy Hotel in London.
The mezzanine tranche has already been extensively pre-marketed with traditional mezzanine funds, which have shown strong interest in the paper.
Only one account is understood to have wavered in committing to the deal. Market talk suggests that orders of around €2.5bn have already been secured, although the leads refused to be drawn on the exact amount.
Although the tranche is essentially done, the leads are still intending to carve out an allocation for funds.
Although leverage on the deal is relatively high at 7.4x net debt to Ebitda, it is being regarded as comfortably within the business’s cash generation ability.
A mezzanine deal topping the €1bn mark has long been considered a possibility, given the proliferation of liquidity for junior debt and the market’s advancing maturity.
Cinven and Warburg Pincus are the sponsors backing the three-way cable tie-up.
The previous record for a European mezzanine tranche was £460m, seen with the LBO of gaming group Gala last autumn.