| LONDON, April 3
LONDON, April 3 A €161m-equivalent portfolio of
loans from Barings has been put up for sale in Europe’s
secondary loan market, banking sources said on Monday.
The sale is thought to be a redemption of a managed fund and
is via a Bids Wanted in Competition (BWIC) process, with bids
due by 2pm UK time on April 5, the sources said.
The BWIC has positions in 45 names, across a number of
tranches and is denominated mainly in euros, with some dollars
The portfolio has an average bid of 98.2% of face value.
Broken down it has an average bid of 99.3% of face value on the
euro loans, 93.9% of face value on the sterling loans and 92.7%
of face value on the dollar loans, according to Thomson Reuters
Barings was not immediately available to comment.
This is the latest BWIC to hit Europe’s secondary loan
market recently after GSO brought two portfolios of loans
totalling €176m last week.
BWICs are a popular way to sell paper as sellers can
guarantee best price execution as the bidding process means
buyers are most likely to put their best offer forward.
“People will bid aggressively as a BWIC prompts a
competitive dynamic. The certainty of supply means people will
not be scared of showing their best hand as they know the paper
will be there if they give the best price overall,” a trader
The BWIC is expected to garner heightened interest from
investors looking to put money to work, disenchanted with the
barrage of repricings and refinancings in the primary loan
market and attracted to the slightly softening secondary market.
Europe’s secondary loan market has softened over the last
few weeks since average bids on Europe’s top40 leveraged loan
composite reached an all-time high of 101.05 on March 7, TRLPC
Now is seen as a good time to sell, in case the market
softens further. While paper may not be getting what it fetched
at the peak, prices are still deemed to be high, sources said.
Had Barings BWIC been launched on March 7, it would have had
an average bid of 99.4% of face value, 1.2 points higher than
98.2 on April 3, TRLPC data shows.
“The BWIC will is likely to get some attention from buyers
but levels wont be at their recent highs,” a senior investor
The trader added: “There are sales happening in case more
softening occurs in the market. People are definitely waiting in
the wings if names continue to drop a point or so.”
Some of the larger positions include €9.5m of Irish food
company Valeo Foods; €8.4m-equivalent of Belgian chemical
distributor Azelis; US$7.3-equivalent of printing and packaging
supplier Flint; €7.3m of chemicals company Platform Specialty
; and €6m of German sports pitch maker Sport Group.
(Editing by Christopher Mangham)