LONDON Oct 5 Banks are preparing to raise 2bn
of senior loans to back Advent International's acquisition of
French aerospace company Safran's biometrics and
security business Morpho, banking sources said on Wednesday.
Advent announced it had entered into exclusive negotiations
to acquire Morpho on September 29, for 2.425bn. French state
bank Bpifrance will invest alongside Advent.
A host of banks will be on the financing, which is expected
to include Goldman Sachs, Credit Suisse, JP Morgan, Nomura, BNP
Paribas, Deutsche Bank, Morgan Stanley, Natixis and Societe
Generale, the bankers said.
The financing will comprise around 2bn of first lien loans,
roughly split between dollars and euros, which is expected to
launch for syndication to institutional investors at the
beginning of November, the bankers said.
The financing is likely to be well received by the leveraged
loan market, which has been desperate for new paper following a
swath of repricings, where borrowers have managed to lower their
cost of credit.
Given the size of the deal, the first-lien will have to be
sensibly priced to attract a wide audience but the demand for
new paper and strength of the company should prevent the company
from paying up, the bankers said.
Pricing on the deal could average around 425-450bp over
Libor/Euribor, with a 0% floor at 99.5 OID, the bankers said.
In addition to the first lien, there will be around 500m of
subordinated paper. The pre-placed preferred equity piece is
expected to be similar to a shareholder loan, but provided by
third party lenders.
Advent declined to comment.
Advent will combine Morpho with Oberthur Technologies, which
it majority owns, to create a leading company in identification
and security, based in France, with over 2.8bn in revenue.
(Additional reporting by Hannah Brenton; Editing by Christopher