Vistra Group Ltd., the financial services company being bought by Baring Private Equity Asia, is looking to fund the deal in the loan market as the Greek financial crisis deters corporate-bond issuance.
Vistra is seeking $700 million of term loans in dollars and euros and will meet potential lenders in London on Wednesday and New York on Thursday, according to a person familiar with the talks, who asked not to be identified because they’re not authorized to speak publicly. The proceeds will also fund a merger with Orangefield Group, the person said.
Sales of speculative-grade bonds, often used to fund leveraged buyouts, dried up in the past two weeks as talks between Greece and its creditors broke down. Douglas AG, the German perfume retailer being bought by CVC Capital Partners, twice decreased a bond offering in favor of loans at the end of June.
“Volatility has certainly been less in the loan market -- borrowers and underwriters will always go to the market where they feel they have the greatest chance of success,” said John Foy, the London-based head of leveraged finance at Prudential Plc’s M&G Investments, which manages more than 242 billion pounds ($373 billion). “How long lived that is will depend on what happens around Greece.”
A London-based spokesman for Vistra wasn’t immediately available to comment on the loan plans.
Baring Asia, which agreed to buy Vistra in May and announced its purchase of Orangefield on Tuesday, will combine the two as part of a plan to expand in the financial services industry, it said in a statement.
Hagen, Germany-based Douglas raised 1.22 billion euros ($1.33 billion) from a seven-year loan facility on June 26. It also sold 635 million euros of bonds, the last sale of junk bonds in euros.