Cerberus, the US distressed investor, beat Guy Hands’ Terra Firma to acquire German aircraft leasing company Debis AirFinance from DaimlerChrysler and four German banks. The deal is backed by a US$1.1bn debt package led by Lehman.
The purchase comes ahead of a potential acquisition of Gerling, the German insurance company. Cerberus is a leading contender in that auction, which is due to close in the next couple of weeks. Cerberus has been an active investor in Germany for the last couple of years, but mainly in distressed debt auctions and real estate transactions. Last year, it bought a portfolio of 7,500 apartments from Deutsche Bank.
Lehman Brothers has been awarded a sole mandate to arrange the financing package. The loan is structured as a bridge to securitisation, including a US$910m two-year, first-lien facility and a US$200m second-lien tranche.
The first-lien tranche is priced at 300bp over Libor, while the second-lien facility will be priced according to demand.
The loans are secured on a portfolio of aircraft and other assets. A limited syndication is due to launch shortly to funds and banks.
Securitisations are increasingly attractive to private equity firms. In a recent survey of European buyout firms by Demica, 60% said that securitisations would become a more important source of replacement capital to ease repayment schedules.
Respondents estimated that 12% of deals already employed trade receivables securitisations, which typically cut financing costs at portfolio companies by 100bp to 150bp in comparison with standard senior debt facilities.
The survey said that 16.3% of buyout structures would contain securitisations by 2006, a growth rate of 37%.
Bayerische Landesbank, Dresdner, DZ Bank and HVB are selling their stakes in Debis alongside DaimlerChrysler.
Private equity firms have been circling the auto giant for the last year with a view to acquiring some of its divisions.