BRIEF- B-Lot to sell real estates
June 28B-Lot Co Ltd * Says it plans to sell Tokyo-based real estates * Price undisclosed Source text in Japanese:https://goo.gl/pJ9cFk Further company coverage: (Beijing Headline News)
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By Claire Ruckin
LONDON May 25 A number of European banks are taking advantage of a window of opportunity to act on highly leveraged deals before the leveraged lending guidelines published by the ECB come into force in six months.
European banks are maximising their ability to offer high leverage in a bid to win deals over their US counterparts that come under the remit of the US leveraged lending guidelines.
Deutsche Bank, HSBC, Credit Suisse and Macquarie are leading a US$2.2bn-equivalent debt financing backing the acquisition of publicly-listed Hong Kong-based international schools operator Nord Anglia Education.
The financing equates to around 7.5 times Nord Anglia's Ebitda, excluding US banks from committing to the deal that exceeds the 6.0 times debt-to-earnings ratio cap imposed on regulated banks.
European banks will come under similar pressure when the ECB guidelines come into effect. It states that high leverage of six times total debt to Ebitda "should remain exceptional" and companies should be able to repay at least half of total debt over a five to seven-year term.
Until then, any deal committed to by a European bank can be upheld, which could prompt a flood of highly leveraged deals.
"Sponsors will be looking to sell and buy highly levered businesses before the ECB guidelines kick in. This is most definitely a window of opportunity," a leveraged finance head said. ISTA AUCTION
European banks and sponsors are hoping an auction for CVC-owned German metering and energy management group Ista wraps up within the six-month window as European bankers are working on debt financings in excess of 7.0 times Ista's approximate €364m Ebitda. Some bankers are working on leverage levels as high as 8.5 times, the sources said.
Goldman Sachs is offering a staple of around 5.8 times, significantly lower than European banks, in a bid to comply with the leveraged lending guidelines, the sources said.
Some bankers are concerned that the business could struggle to repay 50% of the debt within seven years.
In a bid to still attract sponsors, the staple is a hybrid and has infrastructure-style features, including full dividend capacity from closing, to enable dividend payments, the sources said.
CVC was not immediately available to comment.
Some bankers are wary of trying to push the boundaries too far before the guidelines begin. "Banks are leveraging up credits before the guidelines come in. They think they can get away with it, they think there is no threat... and then someone will get a slap," a second leveraged finance head said. (Editing by Christopher Mangham)
BISHKEK, June 28 Kyrgyzstan's central bank kept its policy rate unchanged at 5 percent on Wednesday, the bank said, citing gradual economic recovery and steady inflation in the Central Asian nation.