AA’s £280m bond helps rare debt-lowering LBO

By Owen Sanderson
21 Jan 2021

Barclays took out the bridge financing for TowerBrook and Warburg Pincus’s takeover of UK roadside assistance group The AA on Wednesday, selling a £280m five year bond at 6.5%.

The LBO, unusually, actually deleverages the company. The sponsors are putting in £261m of equity alongside the bond issue, to pay off an existing £541m bond.

The AA was already running pretty hot, with senior leverage of 6.1 times Ebitda and leverage including the B2 notes, now being repaid, ...

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