The new £830 million deal for Coral Eurobet broke for trading into the secondary loan market last week, but activity in the name was muted somewhat because firms that bought the loan in the primary market were holding onto the paper. Lehman Brothers and HBOS were the mandated lead arrangers for the new facility.
Demand for paper in the European loan market continues to be strong. Coral's new "B" loan was trading around the 100-1001/4 mark and the new "C" loan was trading around the 1001/2 level. Loan sources said this new credit represented an increased capacity of institutional investor demand in the European space.
The deal was completed to replace more expensive mezzanine and paid-in-kind debt, explained Michael Mariscotti, Coral's group finance director. The company is slated to save almost £20 million in interest costs. The new loan also contains a £40 million acquisition facility. The company has been "buying betting shops" over the last 18 months, noted Mariscotti. He said the company is likely to continue these types of acquisitions. The acquisition facility has to be utilized over the next few years.