Reorg on the Record: Spate of pulled deals signals end of easy refinancing conditions
Written by Rob Schach, Editor, Europe || The European leveraged finance market started the year where it had left off in 2021, with solid volumes in January as issuers tapped into continued undimmed demand. Even ESG black sheep cigarette filter manufacturer Cerdia managed to pull off a tricky refi.
But the mounting realization that inflation won’t be moderating any time soon, heavy high-yield outflows and Russia on the brink of a second invasion of Ukraine brought an end to the party. By the end of January market jitters caused issuers to sweeten terms, and at the beginning of February deals started getting postponed.
Data, content and technology provider ION Analytics blinked first, shelving its proposed $850 million-equivalent note. Since then resin-based furniture maker Keter postponed its €1.175 billion term loan, followed by U.K. energy company Prax Group’s $250 million note and debt purchaser AnaCap Financial Europe’s €350 million FRN.
Meanwhile Schur Flexibles’ shock balance sheet restructuring just months after the deal syndicated further rattled investors.
The market remains open but the long stretch of easy refinancing conditions seems to have ended, which has already arrested the trend toward ever looser docs but will likely also force some issuers facing difficult refinancings into workouts.
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Our European teams are delivering the most in-depth data, analysis and reporting on thousands of credits that are either stressed, distressed, performing, going through restructuring or post-reorg. Below is a glimpse into our editorial offering:
Corbin & King
Insolvency monitors to U.K. restaurant group Corbin & King appeared in the High Court on Friday, Feb. 4, in response to an application by the group’s majority shareholder, Minor Hotel Group, to end payment moratoriums obtained on Jan. 22. » Continue Reading
Cerba Healthcare SAS
The recent acquisition spree at Cerba Healthcare SAS relevers the France-based laboratory services group, and while the eventual unwind of its Covid-driven revenue boost means earnings will come off their recent peak and cash generation will fall, the deals make sense strategically. » Continue Reading
PAI Partners
PAI Partners is seeking an exit from its portfolio company M Group Services and has hired Citi to explore a potential sale, sources confirmed to Reorg. The U.K. infrastructure services company launched a £100 million term loan B fungible add-on at the end of last month to fund acquisitions and cash on balance sheet. » Continue Reading
WiZink
Reorg analysis shows that Wizink bondholders not in the ad hoc group who consent to the Spanish credit card provider’s restructuring deal and decide to participate in new money could make a recovery of 111%. This is the case even if the value from about 32.5% of equity is ignored; equity can be illiquid and the business could take several years to sell. » Continue Reading
Cheplapharm
Buysiders considering Germany-based pharmaceutical company Cheplapharm’s seven-year €1.48 billion term loan B highlighted the company’s highly acquisitive business model and what some believe to be rising leverage in contrast with the metrics the company is marketing the deal at, as concerns. » Continue Reading
Covid Loans Tracker
Reorg has compiled data on over 100 EMEA companies that received state-backed debt during the Covid-19 pandemic in our new Covid Loan Tracker. The Tracker contains information on €34.8 billion of debt and is available to our subscribers.
