Despite the stress and risk aversion in capital markets in the wake of Credit Suisse's forced rescue, deals are continuing. Stark Group, a Danish builder's merchant, is seeking a €400m term loan B add-on, rated B2/B/B.
After the volatility in the leveraged finance market last year, with leveraged loan issuance in western and southern Europe down 37% to €183bn, according to White & Case, “the current situation makes everyone more nervous,” said the head of loan syndicate at one bank. “Non-investment grade deals are a bit on pause at the moment: investors are not comfortable to come to the market in such a volatile environment, it is a bit a wait and see for now.”
Nevertheless, the building materials distributor owned by CVC Capital Partners has announced a €400m non-fungible add-on to its €1.345bn TLB maturing in May 2028.
The loan will refinance a €375m term loan with Nordic banks, which Stark took on to fund the acquisition of Compagnie de Saint-Gobain's remaining distribution business in the UK. It will also be used to partly repay revolver drawings.
BNP Paribas and JP Morgan are physical bookrunners, alongside Bank of America, Danske Bank, Lloyds, NatWest Markets, Nordea and Nykredit as bookrunners.
Credit Suisse is administrative agent, having left the role as bookrunner which it held for the €1.345bn TLB signed in February 2021.
The loan, through Stark's Winterfell Financing vehicle, is priced at 500bp over Euribor, up from the 350bp Stark paid in 2021. The original issue discount is 95 area, with a 0% floor.
Commitments are due on Tuesday, March 28 at 4pm UK time.
As part of the transaction, Stark will also issue a new super-senior RCF, according to Moody’s. It will mature in November 2027, in line with Stark's existing senior secured RCF.