The €1.830bn loan backing Goldman Sachs Private Equity’s buyout of Pirelli Cables is progressing through the market despite some resistance because of the loan’s lower-than-usual pricing, through MLAs JP Morgan (bookrunner), Lehman Brothers (bookrunner), Banca Intesa and Unicredit Banca Mobiliare.
The MLAs admitted that there had been some bank declines, particularly on the large A tranche, but said that they had gone out to many banks and that syndication was targeted heavily at Italian names, which are supporting the deal.
Senior debt comprises a €350m seven-year term loan A (split between a €150m amortising loan and a €200m bullet) at 150bp–225bp over Euribor, a €265m eight-year term loan B at 250bp, a €265m nine-year term loan C at 300bp, a €500m seven-year revolver at 200bp and a €300m seven-year bonding facility at 150bp. There is also a €150m 9-1/2-year second secured facility, which is already oversubscribed, that has been priced at the talked-about 700bp.
The term loan has been structured as a 12-month bridge to a receivables securitisation programme. The margin on this tranche starts at 150bp and rises to 175bp after nine months. Half of the B and C tranches have been carved out for institutional investors.
Total net debt to Ebitda is 4.3x, while senior net debt to Ebitda is 3.7x. Including capex, opening leverage is 6.3x.
Joint lead arrangers sub-underwriting €80m with a €50m target hold will earn 130bp.
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