The overhang continues to cast a perilously long shadow over leveraged finance in Europe, with no sign of the market opening up for full large-scale public syndications.
While in the US banks are breaking large deals into more easily digested pieces and publicly marketing the discounted paper (see feature opposite), European bookrunners continue to focus on one-on-one meetings with investors and behind the scenes efforts to sell down piecemeal the overhang of mega-buyout debt.
Liquidity is being tested with a small number of more public deals.
Last week also saw
While there has been no successful large-scale sell-down of even discounted debt in Europe, neither has there been forced selling from the underwriters long into the market.
Arranging groups continue to maintain their collective discipline, even in the face of the impetus of quarter and year-end reporting. With discipline holding, investors may abandon hopes of an impending fire sale bona`nza and begin to edge back into the market at current levels.
The result so far is an extremely limited flow of primary deals, with those deals which are in the market likely to remain focused on bank investors, with relationships the word of the moment in European leverage.
While last week saw details emerge of the huge debt package being underwritten for a buyout of UK retailer
Smaller deals do continue to close. Bank relationships were invoked by bookrunner
Syndication of senior and second-lien was targeted to a relationship group. The senior piece was fully signed on September 20. The mezzanine provider signed into the transaction by closing on July 27 2007. According to the bookrunner, demand for the deal was high enough for it to turn down commitments from some banks.
Thule is a Swedish sports utility business, with products including rooftop boxes, roof rails, snow chains, towing systems and motor home accessories. It had pro forma sales of SKr6.6bn in 2006.
At the smaller end of the market, deals are still do-able, particularly as clubs.