Primary market increasingly active

Despite the significantly weaker tone in the secondary market late last week the primary market for leveraged loans has become increasingly active and at the same time increasingly transparent.

The week saw Kabel Deutschland (KDG) close a lightning quick syndication of a €650m add-on facility, through MLA Goldman Sachs. Proceeds will finance its acquisition of 1.2m cable subscribers from rival Orion Group as well as being available for further potential acquisitions. Sources away from the deal say it was placed within three days to a mix of Goldman Sachs related funds and other investors.

The new 5-1/2-year debt ranks pari passu with existing senior term loans and pays 325bp over Euribor.

KDG is Germany’s biggest cable provider. The Orion deal is expected to close by spring 2008 following regulatory approval.

MLAs and bookrunners CIBC and ING have closed syndication of financing backing the buyout of Vizada. DnB Nor and HSH Nordbank are MLAs on the transaction, which closed oversubscribed with some scalebacks. The deal was supported by Nordic bank investors in particular with French banks also active in the group.

The facility comprises a US$50m term loan A paying 225bp over Libor, a US$116m B tranche at 275bp and a US$116m C loan at 325bp. There is also a US$40m second-lien priced at 5.25% and US$55m mezzanine loan with a 10.5% margin, that has already been placed with one fund and a bank.

Last week saw the launch of syndication of the €1.48bn loan package backing Carlyle‘s buyout of Applus through MLAs Barclays, Calyon, Caja Madrid, SG and ICG.

Senior debt totals €835m and is split between an 8-1/2-year €610m term loan B paying 275bp, a seven-year €150m tranche paying 225bp and a seven-year €75m line paying 225bp. In addition the €100m 9-1/2-year second-lien loan pays 5% and has 102/101 call protection. The mezzanine tranche is €150m. Banks are being offered the term loan B and the second lien.

Applus is a Spanish inspection, certification and testing company.

Also launched last week was a €435m debt package supporting Sagard and Barclays‘ buyout of Flakt Woods through MLA RBS.

Senior debt is split between a €30m seven-year term loan A paying 225bp over Euribor, a €97.5m eight-year term loan B at 312.5bp, a €97.5m nine-year term loan C at 362.5bp, a €50m seven-year revolver at 225bp and a €50m amortising seven-year acquisition facility also paying 225bp. In addition there is a €70m 9-1/2-year second-lien facility paying 475bp and a €40m pre-placed 10-year mezzanine loan.

Senior leverage is 4.8x and total leverage is 6.8x September 2007 LTM Ebitda of €55.6m. Luxembourg-based Flakt Woods designs and assembles air climate and air movement products.

RBS, as MLA and bookrunner, has also launched a general syndication of debt backing CVC‘s LBO of luggage brand Samsonite. The debt package includes a US$1.3bn term loan, which directly finances the buyout, and a US$125m revolver for ongoing working capital needs.

Debt is split between a US$745m eight-year bullet term loan B paying 300bp over Libor, a US$275m nine-year second-lien bullet at 500bp, a US$205m 10-year PIK bullet paying 9.25%, a US$125m seven-year revolver paying 225bp, and a US$100m seven-year amortising acquisition facility paying 250bp.

In the market with a less formal syndication is arranger ING with a €350m package for Italian autoparts distributor Rhiag. Three regional banks joined at a senior level and a mezzanine tranche has been placed with domestic funds.

A more general syndication is targeting a wide number of funds and a small number of banks, though banks are expected to make up the bulk of the final investor group.

The deals join a growing list of names, including PHS, Elis, Telenet, HSS and Russia’s Nidan Soki, which are being shown to investors and which bookrunners will hope to close before the winter break.