Rising to the challenge
Amid a steep decline in loan issuance in 2023 and challenging market conditions, JP Morgan carved out a role as the lender of choice on some of the biggest and most significant global transactions. It is IFR’s Loan House and Americas Loan House of the Year.
Loan issuance tumbled globally in 2023 amid rising rates, a valuation gap between buyers and sellers that kept acquisition activity to a minimum, and the emergence of private credit, which stepped in as an alternative buyout financing provider.
Despite the slowdown and some of the most challenging lending conditions seen in recent years, JP Morgan was behind some of the biggest deals of 2023 including the massive US$8.65bn-equivalent financing for merchant payments business Worldpay. The US$5.2bn first-lien term loan B to back private equity firm GTCR’s acquisition of a majority stake in the company, was among the largest LBO syndicated financings since the 2008 financial crisis and is IFR’s North America Leveraged Loan of the Year.
JP Morgan led the 2023 US leveraged new money bookrunner table, taking an 11.15% market share with a healthy lead over second-placed Bank of America, which took a 9.39% share. In doing so JP Morgan swapped places with its biggest rival, moving up from the second spot in 2022 when it had 9.04% market share compared to BofA’s 9.8%.
The bank also sat atop the US institutional new money bookrunner league table in 2023 with a 7.27% market share, ahead of Goldman Sachs’ 6.07% share. It retained its 2022 title but also increased its market share, up from 6.18% of the market.
While JP Morgan was the second-largest US investment-grade bookrunner in 2023, its 14.6% market share was a step up from its 13.98% share of the market in 2022.
The bank led a number of eye-catching deals, including acting as global coordinator on a mammoth US$16bn financing in March for automaker General Motors that amended and restated three different revolving lines of credit.
The company renewed and reduced the total borrowing capacity of a five-year facility that matures in March 2028 to US$10bn. It also renewed and reduced the capacity for a three-year facility that comes due in March 2026 to US$4.1bn. A 364-day US$2bn revolving line of credit was also renewed and matures on March 30 2024. JP Morgan was administrative agent on the financings.
The financing for Worldpay was a bright spot in the leveraged loan market in 2023 amid a generally gloomy year. The deal was a highlight not just for its global nature and size, but also because it flew through the market, with arrangers able to upsize the US dollar tranche as well as tighten pricing.
JP Morgan was lead-left on the US dollar loan and bond tranches.
The final structure comprised a US$5.2bn first-lien term loan B, a €500m TLB, a US$2.175bn secured bond and a £600m secured bond, after the US dollar loan and the US dollar bond were increased from US$3.4bn and US$2bn, respectively. Concurrently, the euro TLB was cut from a US$1bn-equivalent target, while the sterling bond was downsized by £100m.
Pricing on the seven-year first-lien US dollar term loan was tightened to 300bp over SOFR, from 350bp–375bp, while the OID was also tightened to 99.5 from 99.
European leader
JP Morgan was a major player across the EMEA region in 2023, taking an US$18.3bn market share in the role of bookrunner on 77 deals as the bank remained an important and trusted partner to its clients across event-driven financing, corporate refinancing and leveraged markets.
It was once again a dominant player in the European leveraged loan landscape. The bank fully underwrote on a sole basis Software AG's €1bn-equivalent TLB, which marked a rare but high-profile victory for banks over direct lenders in 2023 and also won IFR’s EMEA Leveraged Loan of the Year.
The seven-year loan to back the German company's take-private by Silver Lake was split between a €640m tranche and a US$405m leg, as the distributed market proved it was back and playing in size for an LBO, while keeping a strong grip on price.
Software AG has a natural need for US dollars and the added currency helped to maximise price pressure.
Bankers tightened terms twice on the euro loan and three times on the US dollar tranche, but the transaction remained highly oversubscribed. The margins were cut to 475bp over Euribor/SOFR from 500bp, while the OID on both tranches tightened to 98.75 from 97 at launch.
JP Morgan’s ability to generate interest in both the US dollar and euro markets for new money was also on display for chemicals distributor Univar.
Univar upsized its senior secured loans to back its buyout by Apollo Global Management, while at the same time reducing the secured bond, increasing the total debt quantum to US$4.15bn from US$4.1bn.
The seven-year loans comprised a US$2.4bn TLB, up from US$1.75bn, and an €870m TLB, increased from US$550m-equivalent. The concurrent secured bond was US$800m, down from US$1.8bn.
The loans priced in line with guidance at 450bp over SOFR/Euribor with a 0% floor. Both tranches finalised with a 98 OID, tightened from 97–97.5 at launch.
In a year when issuers worked hard to manage their maturity profiles, JP Morgan was also at the heart of many major amend and extends. The roster included one of the largest A&E stories of the year, with JP Morgan helping chemical manufacturer Nouryon extend around US$5bn-equivalent of loans across two exercises.
Nouryon was originally planning to address the entire stack in May. But it decided to leave a portion for later in the year, returning in September. That decision had been driven by lender constraints and to make the execution of the large US dollar section cleaner.
Showcasing its work in the chemicals sector, unloved by many investors for its highly cyclical nature, JP Morgan was lead arranger and bookrunner for Chemours and its dual-currency TLB that refinanced its existing US$762m and €332m TLBs due 2025.
JP Morgan acted on its own as physical bookrunner for Swiss tax-free shopping and payments company Global Blue, which allocated a €610m TLB.
The new TLB formed part of a wider exercise from Global Blue to refinance its capital structure maturing in August 2025, alongside a new €100m revolving credit facility due in 2029. The transaction was given a timely boost by Global Blue unveiling a share purchase and investment agreement with Chinese internet and technology company Tencent.
The bank was also sole physical bookrunner for Galileo Global Education in a deal that was part of September’s short-lived repricing wave. Galileo cut an impressive 75bp from the margin, making even bigger inroads into its existing margin than predecessor Nord Anglia, which snipped 50bp off its euro and US dollar TLBs.
In the corporate market, the bank won a bookrunner role on a €4.1bn-equivalent loan backing German gases group Messer’s full takeover of its Messer Industries joint venture and the refinancing of existing debt.
JP Morgan took the lead on a €2.45bn bridge loan supporting German life science and biopharmaceutical technology group Sartorius’ acquisition of French cell and gene therapy company Polyplus.
The bank led and structured a fully committed US$1.1bn debt financing backing Prague-based Czechoslovak Group’s US$1.91bn acquisition of the sporting products business, rebranded as Revelyst, of US-based Vista Outdoor.
It played a lead role in the €5.4bn of loans supporting the separation of Belgian chemicals group Solvay into two independent publicly traded companies.
JP Morgan also saw success as a joint bookrunner on UAE aviation services company Dubai Aerospace Enterprise’s US$1.6bn syndicated loan, the company’s largest ever bank loan, refinancing a maturing facility and supporting future financing needs. Due to significant demand, the loan was upsized to more than twice the initial size.
This was on top of taking bookrunner roles on some of the largest and most prestigious refinancings of the year, including BMW, Rolls-Royce and Sasol and sustainability-linked facilities for Iberdrola, Saint-Gobain, Pernod Ricard and Gold Fields.
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