Staple Financing Moves From Exception To Norm

Staple financing, where the advisors to a company that is on the block offer financing to potential buyers, is said to be on the rise, according to Corporate Financing Week, an LMW sister publication.

  • 25 Jun 2004
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Staple financing, where the advisors to a company that is on the block offer financing to potential buyers, is said to be on the rise, according to Corporate Financing Week, an LMW sister publication. "Staple financing is becoming the norm rather than the exception," said Edward Yorke, co-head of Credit Suisse First Boston's financial sponsor coverage group.

Thomas H. Lee Partners' acquisition of brokerage firm Refco Group for $2.25 billion is a leading example, with Credit Suisse First Boston, Refco's advisor, as well as Banc of America Securities and Deutsche Bank, T.H. Lee's advisors, offering a loan and bond package for the transaction. But Yorke added that many middle-market M&A deals involving financial buyers now involve staple financing.

Staple financing offers the advantage of being more convenient and speedy since the seller's advisor does the due diligence and puts forward a financing package to the potential buyer. "There is an opportunity to shorten the timeline and increase the likelihood of the deal being done," said Simon Western, a managing director in the financial institutions group at B of A who worked on the Refco deal. Staple financing offers tremendous advantages for the investment banks as well. They get both M&A advisory and debt underwriting fees for the same deal and increase the chances of it actually getting done. T.H. Lee officials did not return calls.

  • 25 Jun 2004

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 BNP Paribas 14,443 29 18.07
2 Bank of America Merrill Lynch (BAML) 8,264 27 10.34
3 Lloyds Bank 7,329 24 9.17
4 Citi 6,748 19 8.44
5 JP Morgan 5,220 8 6.53

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 117,261.12 337 11.09%
2 Bank of America Merrill Lynch 94,723.52 272 8.96%
3 JPMorgan 92,612.23 269 8.76%
4 Wells Fargo Securities 82,597.19 239 7.82%
5 Credit Suisse 69,442.99 183 6.57%