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Rlpc liquidity boost puts big loans back on european agenda


Jan 17 The abundance of liquidity in the European leveraged loan market has restored its capacity to finance bigger deals, prompting sponsors to consider pure European financings to back potential M&A deals, including French broadcasting masts operator TDF's domestic business. Liquidity has been boosted by a lack of M&A last year, a number of repayments and the emergence of new CLOs and credit funds. Private equity firm Dering Capital is in advanced talks to buy TDF as the last remaining bidder in the sale process and is approaching a number of banks to see what financing can be put in place to back an acquisition. The sale would require over 2 billion euros ($2.71 billion) of debt and Dering is seeking to fund the potential buyout with debt denominated solely in euros, structured as all-senior leveraged loans or senior and subordinated debt. The loan could be a similar size to last year's 2.3 billion euro financing backing CVC's acquisition of a majority stake in German energy metering firm Ista, which was the largest pure European buyout loan since 2007, according to Thomson Reuters LPC data."A lot of money has been raised in new CLOs, managed accounts that have come to Europe and international funds that have European baskets, which means that although it isn't pure European money, it is denominated in euros. There is an awful lot of liquidity to do pure European leveraged financings and people wouldn't blink at raising 3 billion euros of loans for one deal," a syndicate head said.

Bankers are also preparing leveraged loans of up to 700 million euros for the planned sale of a minority stake in veterinary pharmaceutical firm Ceva Sante Animale. Ceva's management held presentations with a large number of banks last week to talk through potential debt packages. The company wants an all-euro covenant-lite financing consisting of senior loans and a preplaced subordinated loan. With so much liquidity in the market, loan terms are getting more aggressive and it is only a matter of time before the first pure European covenant-lite loan launches.

Nevertheless, some banks remain cautious and will want to make sure they have a safety net and are likely to push for flex in documents to allow them to raise dollar financing if necessary."On a very large deal it is preferable to have flex language to go to the dollar market because it is deeper and more liquid. A lot of times, bankers will want that flexibility," the syndicate head said.

PRICING PRESSURE An overwhelming amount of liquidity is also pushing pricing tighter in Europe. On Friday, pricing emerged on a loan financing backing Hellman & Friedman's acquisition of a 70 percent stake in Deutsche Telekom's classified advertising business Scout24. A 645 million euro seven-year Term Loan B will pay 425bp-450bp and is offered with a 99.5 OID, while a 50 million euro six-year revolver will pay 425bp. The financing also comprises a 50 million euro eight-year second-lien tranche, which was preplaced with Macquarie."Scout 24 could even flex down to 400bp. At the moment, 400bp to 425bp is the market," an investor said. That represents a fall of 25bp-50bp from a year ago, when the average Term Loan B margin was 450bp, Thomson Reuters LPC data shows. ($1 = 0.7376 euros)

Rpt fitch affirms crc breeze finance sa; outlook stable


(Repeat for additional subscribers)Nov 7 (The following statement was released by the rating agency)Fitch Ratings has affirmed CRC Breeze Finance S. A.'s (Breeze2) class A and class B as this site class A (XS0253493349) affirmed at 'B'; Outlook StableEUR30m class B (XS0253496441) affirmed at 'CCC'The rating affirmation reflects the steady performance of the wind farms in 2013 with plant availability largely stable at around 96% and operating costs in line with budget. Wind conditions during most of 2013 were weaker than in the previous two years and broadly in line with 2010, the weakest year so far, putting significant strain on the project's liquidity. KEY RATING DRIVERS Revenue Risk- VolumeThe initial wind study grossly overestimated the project's wind resource and as a result a new study was commissioned in 2009, which revised down the wind forecast. In 2011 and 2012 the project exceeded the revised P90, but fell short of the revised P50. As such the project's liquidity position remains tight and is not expected by Fitch to improve materially.

Furthermore the variability of wind yield during the year, coupled with the uniform principal repayment amount at the May and November payment dates, results in the company being unable to service its class B notes fully at the November payment date.(Weaker)Revenue Risk - PriceThe wind farms are remunerated through fixed feed-in-tariffs embedded in German and French energy regulations. Limited exposure to merchant prices (approximately10% of the portfolio's generation capacity increasing to 23% at the last payment date) in the last three to four years stems mainly from the shorter period over which French tariffs are fixed (15 years from commencement of operation compared with 20 years for German projects).

(Midrange)Operation RiskThe key operational risk is the increase of maintenance and repair costs as the turbines age. Fitch notes that increases in operating cost have been factored into the project's financial projections. However unexpected technical failures, such as gearbox breakdowns, can impact negatively Breeze 2's ability to service debt, in particular, if the failure coincides with weak wind yield. Breeze 2 aims to make efficiency savings by concentrating wind farm management in a single entity (Theolia). This is, however, subject to trustee approval, which has not been granted to date. The company also plans to strengthen protection from turbine unavailability accidents through tighter insurance and O&M contractual provisions.

(Weaker)Debt StructurePayments on the class B are deferrable and are fully subordinated to the payment of interest and the repayment of principal on class A. The amount currently deferred on class B is EUR13.5m. Fitch does not expect that the borrower will be in the position to pay back this amount, nor possible future additional deferred amounts, unless energy production consistently and materially exceeds the historical average. Due to the class A debt service reserve account's (DSRA) structural subordination to class B debt service Breeze's class A debt reserve will not be replenished (EUR2.2m were drawn in 2009) as long as class B deferrals remain outstanding. Class B DSRA was fully eroded in the same year. (Midrange - Class A; Weaker - Class B)RATING SENSITIVITIES The rating could be downgraded as a result of weak wind conditions, a material decline of the turbines' availability and/or a lasting increase in O&M costs above the company's current expectations. Wind yield at or above P50 enabling the project to repay the deferred class B principal and replenish the class A DSRA may lead to a rating upgrade. SUMMARY OF CREDIT Breeze 2 is a Luxembourg special purpose vehicle that issued three classes of notes on 8 May 2006 for an aggregate issuance amount of EUR470m to finance the acquisition and completion of a portfolio of wind farms located in Germany and France, as well as establishing various reserve accounts. The notes are scheduled to be repaid from the cash flow generated by the sale of the energy produced by the wind farms, mainly under regulated tariffs. A change of control took place in January 2013, when Theolia acquired 70% of class C from International Power and Theolia's CEO was appointed as Managing Director of Breeze 2. This resulted in temporary disruption of information flows with significant delays in receiving quarterly performance reports and the 2012 financial statements, which remain outstanding. Fitch will also monitor possible changes in Breeze 2's operational performance as the new management adjusts its business strategy. var $relatedItems = $('lia "/article/riyad-bank-dividend-idUSD5N1E9002"Saudi\'s Riyad Bank recommends lower cash dividend for H2 2016/a/lilia "/article/idUSFWN1EU0AO"BRIEF-CME Group reached record average daily volume of 15.6 mln contracts in 2016/a/li'), $relatedItems = $relatedItems.slice(0,10), relatedBlockLimit = Number('6'), relatedItemsTotal = $relatedItems.length, $paragraphTags = $('#article-text p'), contentParagraphs = 0, minParagraphs = Number("8"); for (i=0; i $paragraphTags.length; i++) { if ($paragraphTags[i].innerText.trim().length 0) { contentParagraphs = contentParagraphs + 1; } } if (contentParagraphs minParagraphs) { setTimeout(function(){ if (relatedItemsTotal relatedBlockLimit) { $('.first-article-divide').append('div class="related-content group-one"h3 class="related-content-title"Also In Financials/h3ul/ul/div'); $('.second-article-divide').append($('.slider.slider-module')); $('.third-article-divide').append('div class="related-content group-two"h3 class="related-content-title"Also In Financials/h3ul/ul/div'); var median = (relatedItemsTotal / 2); var $relatedContentGroupOne = $('.related-content.group-one ul'); var $relatedContentGroupTwo = $('.related-content.group-two ul'); $.each($relatedItems, function(k,v) { if (k + 1 = median) { $relatedContentGroupOne.append($relatedItems[k]); } else { $relatedContentGroupTwo.append($relatedItems[k]); } }); } else { $('.third-article-divide').append($('div class="related-content group-one"h3 class="related-content-title"Also In Financials/h3ul/ul/div')); $('.related-content ul').append($relatedItems); } },500); } Next In Financials Dubai Islamic Bank requests proposals for dollar sukuk - sources DUBAI, Jan 4 Dubai Islamic Bank (DIB) has asked banks to submit proposals to arrange a potential U.S. dollar-denominated sukuk issue, sources familiar with the situation said on Wednesday. BRIEF-Colliers International UK acquires hospitality asset management firm * Colliers international uk acquires market leading hospitality asset management firm BRIEF-Dena bank to consider capital planning for FY 2016-17 * Says to consider capital planning for FY 2016-17 i.e. raising of capital through equities and/or bonds Source text: this site Further company coverage: MORE FROM REUTERS window._taboola = window._taboola || []; _taboola.push({ mode: 'organic-thumbnails-a', container: 'taboola-recirc', placement: 'Below Article Thumbnails - Organic', target_type: 'mix' }); Sponsored Content @media(max-this site) { #mod-bizdev-dianomi{ height: 320px; } } From Around the Web Promoted by Taboola window._taboola = window._taboola || []; _taboola.push( { mode: 'thumbnails-3X2', container: 'taboola-below-article-thumbnails', placement: 'Below Article Thumbnails', target_type: 'mix' } ); window._taboola = window._taboola || []; _taboola.push