Ziggo Group Holding BV, which is merging with Vodafone Group Plc’s Dutch business, plans to raise the equivalent of about $1.6 billion in one of the biggest leveraged-loan refinancings in Europe this year.
The company is seeking 750 million euros ($831 million) and $750 million debt maturing in August 2024 to refinance existing term loans maturing in March 2021 and January 2022, according to a person familiar with the matter, who is not authorized to speak publicly and asked not to be identified.
Investor demand for leveraged loans has risen this year as central bank stimulus pushes yields in the region’s bond markets to record lows. Increased risk appetite has pushed loan prices to the highest in a year and fired issuance of collateralized loan obligations, which package the debt into tradeable securities.
“Ziggo is a known issuer to the market and the deal is expected to be well received,” said Benjamin Edgar, a portfolio manager at Intermediate Capital Group, which has 22 billion euros under management. “Accounts will continue to look for places to put cash to work as recent allocations have been challenging.”
Officials at Utrecht, Netherlands-based Ziggo were unable to immediately comment on the deal. Ziggo parent, Liberty Global Group Plc, and Vodafone won European Commission permission to merge their Dutch operations earlier this month.
The average price of loans in euros rose to 97.6 cents on the euro on Friday, according to a Standard & Poor’s Global Ratings index. European leveraged loans returned 5.5 percent in 2015, the seventh year of gains, according to S&P, and are set for an eighth with earnings for 2016 at 1.7 percent.
French packaging maker Verallia Packaging SASU and German cosmetics retailer Douglas Holding AG issued similar-sized loans this year to refinance debt, according to data compiled by Bloomberg.