Loans race

1 October 2010 By Alexander Smith

Leverage is creeping back up again on European buyouts. Banks insist there’s no danger. Fees and interest margins are higher, loans smaller and the risk syndicated more widely than in the boom. Still, banks must resist competitive pressure to offer eager LBO firms too much debt.

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CVC Capital Partners is buying Swiss telecommunications operator Sunrise Communications for an enterprise value of 3.3 billion Swiss francs from Denmark's TDC. The acquisition, the biggest European buyout since 2008, is more than 75 percent debt funded. The 2.5 billion Swiss franc debt financing package has been fully underwritten by BNP Paribas, Deutsche Bank, Societe Generale, UBS and UniCredit. The purchase is subject to Swiss regulatory approval.

Onex Corporation and Canada Pension Plan Investment Board said on Sept. 30 they had completed the acquisition of Tomkins in a deal worth $5 billion including debt.

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