CVC to Carlyle Seek Buyout Debt With Loan Prices at 3-Month High

CVC Capital Partners Ltd., Carlyle Group LP are among private-equity companies marketing $1.41 billion of high-yield loans in Europe this week as prices of the debt reached the highest level in three months.

CVC is meeting lenders today in London to seek 320 million euros ($420 million) in loans to back its buyout of Campbell Soup Co.’s European business, according to data compiled by Bloomberg. Carlyle Group met lenders Sept. 3 to discuss 340 million pounds ($530 million) of senior debt backing its purchase of U.K. packaging firm Chesapeake Ltd.

After raising $4.1 billion in loans in the region last month, buyout firms are raising debt for new acquisitions and are also seeking refinancings with LBO France asking for a debt extension for cargo-handling company Worldwide Flight Services Inc. Prices of leveraged loans climbed last week to 92.9 cents on the euro, the highest since May 31, according to the Standard & Poor’s European Leveraged Loan Index.

“Syndication is off to a good start this year, generally the first week back after summer is quiet,” John Foy, the London-based head of leveraged finance at Prudential Plc’s M&G Investments, said in a telephone interview. “The pipeline looks thin and I expect more amend-and-extends and bonds than new financings.”

Buying Time

WFS, based in Roissy-en-France, met lenders yesterday to seek permission to extend a credit line and term loan B to October 2015. The company is offering to pay an interest margin on the extended portion of 400 basis points, or 4 percent, more than benchmark borrowing rates.

The financing backing CVC’s acquisition of Campbell Soup Europe includes a 190 million-euro term loan B paying interest of 475 basis points more than benchmark rates, according to data compiled by Bloomberg.

Chesapeake’s borrowing includes about 290 million pounds of term loan B debt comprising portions in pounds and euros. The company is offering to pay interest margins of 500 basis points and 450 basis points on the two tranches, respectively.

Providence Equity Partners Inc. and Airbridge Investments hosted a bank meeting this week for a 355 million-euro refinancing of M7 Group SA’s loans. Proceeds of the borrowing will fund a dividend and refinance existing debt. The satellite television provider’s fundraising includes a 270 million-euro term loan B paying an interest margin of 500 basis points.

New Financings

The owners of Scandlines, 3i Group Plc and Allianz Capital Partners GmbH, are planning to obtain loans to replace the group’s buyout debt from 2007. The refinancing, which may start next month, follows an attempt to sell the business that attracted lower than expected bids.

The acquisition of Austrian refrigerator maker AHT Cooling Systems GmbH by Bridgepoint Advisers Ltd. will be financed by about 358 million euros of loans arranged by ING Groep NV, Societe Generale SA and UniCredit SpA.

Aenova Holding GmbH’s lenders are voting on a request from the German dietary supplement company for permission to make an acquisition. The BC Partners Ltd.-owned business may sell 130 million euros of loans if allowed to proceed.

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