Americas Loan House: Morgan Stanley

Mobile tower operator Crown Castle whipped up more than US$11bn of cash commitments over a weekend to back an equities offering for a company on the lowest rung of the investment-grade ladder. Crown Castle’s bridge loan for its US$7.1bn cash purchase of Lightower Fiber Networks was the third-largest bridge-to-equity financing ever, and the second-biggest underwritten commitment in the US this year for a Triple B minus credit. It was a deal that lead-left arranger Morgan Stanley calls “the marquee event financing Street-wide globally this year”...

Debt-laden Digicel got some vital breathing space in 2017 and opened up a whole new market for itself with a US$1.355bn financing that included a rare Term Loan B. In the biggest-ever Term Loan B seen in emerging markets, the Caribbean and Central American mobile telephony operator shifted a good chunk of its debt from the covenant-heavy bank market to the less-restrictive institutional market in one fell swoop. With the intention of refinancing a US$856m in loans at holding company DIFL, leads launched a Term Loan A among relationship banks...

In 2017 leveraged loans were on fire, reaching levels of activity not seen since the financial crisis. Investors ploughed money into the product and borrowers showed a preference for the paper over high-yield bonds. Covenant-lite deals became the mainstay of the market, as did increasingly flexible documentation and compressed yields, all offered without restrictive non-call periods. Goldman Sachs noted a shift in sentiment towards loans early on and made a concerted effort by increasing resources devoted to the area, leapfrogging some of the...

Standing out from the crowd of standard investment-grade M&A bridge loans, ChemChina’s landmark US$20bn non-recourse loan backing its acquisition of Swiss agrochemical and seeds company Syngenta provided a model for large-scale outbound Chinese acquisition financing. The US$43bn purchase was of strategic importance to China, which is looking to increase food security for its growing population, while taking part in the consolidation of the global agrochemical and seed industry. “The deal itself was the largest ever outbound acquisition by a...

Credit Suisse distinguished itself from its peers in 2017 with a collection of leading roles on challenging deals, including event-driven financings and debut borrowers across Asia-Pacific. The Swiss bank focused on situations where it could add value – and make money – using its balance sheet judiciously to support key clients. Credit Suisse does not chase every deal, but its strategy paid off handsomely in a year when cash-rich Asian institutions were crying out for higher-yielding assets. “We have focused on playing to our strengths in...

China National Chemical’s whopping US$12.7bn bridge loan played a key part in financing its takeover of Syngenta and raised the bar for event-driven financing in Asia as the largest syndicated acquisition loan on record in Asia-Pacific (excluding Japan). The recourse loan was designed to help fund ChemChina’s equity contribution to its transformational US$43bn acquisition of the Swiss seeds and pesticide company, and sat alongside a US$20bn non-recourse facility at the target level that is IFR’s EMEA Loan of the Year. ChemChina’s bid for...

Robust US leveraged loan market conditions in 2017 helped companies to slash borrowing costs in opportunistic deals but lesser-known borrowers and story credits were still subject to scrutiny and held to high standards despite investors’ strong appetite and ability to lend. The challenge of overcoming periodic displays of market discipline was highlighted by a US$1.85bn loan for internet security company DigiCert, which financed its purchase of Symantec’s website security and public key infrastructure unit in August. The deal funded a Goliath...

The €1.625bn loan for Germany-based building materials maker Xella was the first sizeable LBO out of the blocks in 2017 and set the tone for the leveraged loan market for the rest of the year. The underwriting banks had to overcome a number of hurdles before the deal closed and became the largest single-tranche sponsor-led covenant-lite euro Term Loan B since the financial crisis and the largest European leveraged loan in the IFR Awards review period. “It was an ambitious and aggressive transaction to underwrite that we had to take a view on,...

The US$315m covenant-lite leveraged buyout loan supporting private equity firm Hellman & Friedman’s acquisition of SnapAV was a tricky deal and still scored an execution that put it among the most aggressive and competitive middle-market loans of 2017. UBS was lead-left arranger, with SunTrust on the right. The company, a supplier of audio-visual products in the rapidly growing connected home sector, has US$50.1m in Ebitda, putting it squarely in the middle market, but at the lower threshold for covenant-lite loans.  “It was a small deal with...