The ongoing low-deal market environment is forcing the European leveraged loan bankers to lead more lucrative public to private financings. This desperation for fees witnessed the collapse of a handful of recent deals. As a result lenders are experiencing some signs of frustration. Currently fees on a P2P are typically around 1.5% which is the same as an LBO underwrite.
Any underwrite for a P2P involves more resources when compared with an LBO. The banks hardly have any access to information on a public company in P2P loans due to which they end up doing transactions slightly blinded. Whereas the bank is enabled to scrutinize every aspect of a business in case of a private situation. Therefore dealing in P2P loans is not only hard for people to do the work but it is also riskier for the banks. The pressure for the deal to succeed grows immensely higher in this P2P loans. According to the first syndicate head – “P2P loans is one big shot at a time but really worth the effort when you get it right.”
It was observed that banks happen to drop a €2.72bn leveraged loan financing for German online classifieds group Scout24. A second syndicate head informed that “Scout24 got very frustrated with it.”
Not only this, last year the banks also failed in some takeover bid by Apax where they missed out a fee of approximately €28m. This in turn further impacted a depleted 2019 budget. To cover this up currently the banks are eager to get the financing done for Car auctioneer BCA Marketplace. It seems BCA is returning to Europe’s leveraged loan market with a £1.387bn financing to back its £1.91bn acquisition by British private equity firm TDR. People are also looking for alternate sources like kreditus.eu to compare various financial services and get the best for them.
Taking a glance of the future here below are some potential sizeable deals which include:
- £5.91bn acquisition of UK theme park operator Merlin Entertainments
- £1.91bn buyout of car auctioneer BCA Marketplace
- US$3.7bn acquisition of US auction house Sotheby’s
- KKR’s €6.8bn offer for German publisher Axel Springer
- €885m acquisition of sustainable food provider Koninklijke Wessanen
- US$3.3bn acquisition of British satellite company Inmarsat and
- US$4bn acquisition of WPP’s data analytics unit Kantar.
Let us hope for the best from the above deals.