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LevFinLevFin Leveraged Loans

DomusVi bags 325bp margin for LBO loan amid repricings


Europe’s leveraged loan market was set for more than €4bn of offerings this week, as borrowers revel in friendly pricing conditions. Large facilities such as the €1bn loan for DomusVi that was launched on Monday could achieve the tightest prices, said bankers.

“There’s still a large amount of money to come through in the market,” said a leveraged finance banker about this week’s pipeline of five deals. “At the moment, there seems to be a price for most things. Conditions continue to be strong.”

On Monday came clear proof of how borrower-friendly the market feels at the start of 2017’s last quarter. HomeVi, the holding company of French nursing care provider DomusVi, released guidance of 350bp over Euribor for its €1.02bn seven year term loan ‘B’. 

This spread tested the level market participants have said is the tightest they believe single-B rated loan margins can go. But it was tightened to 325bp on Wednesday. 

HomeVi has ratings of B1/B from Moody’s and Standard & Poor’s. The new loans, priced at 99.5 with a 0% Euribor floor, will fund its acquisition from PAI Partners by Intermediate Capital Group and Sagesse Retraite Santé, an investment vehicle controlled by Yves Journel.

“The net beneficiaries of this hot market are private equity funds,” said the head of financial sponsors at an investment bank. “Bigger is better — investors feel more confident about bigger transactions.”

HomeVi’s deal includes a €130m revolving credit facility. Mandated lead arrangers are BNP Paribas, Crédit Agricole, Deutsche Bank and Natixis.

The issuer is using proceeds to repay its 2021 high yield bonds. These are a €600m bond that pays a coupon of 6.875% and a €200m floating rate note paying 425bp over Euribor.

Repricing tickets

HomeVi had scheduled the commitment deadline for Tuesday, the same day chosen by Global Blue, the Swiss shopping tax refund firm, for commitments for its €360m five year term loan ‘D’.

Global Blue’s loan (see separate story) had a 1% Euribor floor and a margin of 375bp over Euribor. It wanted to reprice the facility with a 0% floor and a 375bp-400bp spread, and also achieved favourable terms.

Three other issuers were also out in the market with sizeable repricing deals. New Jersey’s Catalent Pharma has $1.25bn and €312m of term loans ‘B’ on the table. Corialis, the Belgian aluminium building systems firm, is seeking €355m and £130m. Inovyn, the French chlorvinyls firm, brought a €829m deal.