Thoma Bravo, this time, wants Wall Street to help refinance her loan
(Bloomberg) – Thoma Bravo is a fan of multi-billion dollar private loans to fund buyouts – the kind that bypass Wall Street’s syndicated loan bureaus completely. But he is not definitely turning his back on the banks.
The private equity firm brought in a group of lenders led by Bank of America Corp. to refinance a unitranche loan for software company ConnectWise LLC. It’s a victory for a leveraged loan market that has lost a slew of debt deals this year for large acquisitions funded by the private credit market – some signed by Thoma Bravo himself.
The sponsor ignored the banks when it secured $ 2.6 billion in debt financing for its Stamps.com buyout in July, and a $ 2.3 billion loan for Calypso Technology Inc. in April. When she turned to direct lenders for her acquisition of ConnectWise in 2019, those loans rarely exceeded $ 500 million.
Buyout companies are increasingly turning to private credit to finance increasingly large transactions, attracted by greater speed and generous terms. Direct lenders have a record $ 364 billion in ready-to-use cash, allowing companies like Owl Rock and Ares Management – often associated in small groups – to fund multi-billion dollar transactions that it Just a few years ago, were exclusively the territories of the largest investment banks in the world.
A representative for Thoma Bravo did not immediately respond to a request for comment.
Why Unitranche loans have gone from niche to billions: QuickTake
However, the bright red market for syndicated loans also has its advantages – lower borrowing costs are a part of it in some cases. ConnectWise meets investors Monday for the new $ 1.05 billion leveraged loan sale.
Elsewhere in the credit markets:
Blackstone Private Credit Fund and Broadstone Net Lease real estate investment trust are offering bonds on the US Investment Grade market on Friday. Both deals follow an avalanche of 52 companies that sold $ 76 billion in debt in the past three days
- This week’s onslaught in issuance didn’t make US corporate bonds any cheaper. In fact, spreads have tightened, underscoring the strength of global demand for the only quality yield game in town.
- The US primary junk bond market has gotten off to a slow start after Labor Day with just over $ 3 billion sold so far this week, but new issues have been well received with every resumption of secondary trading, according to Trace.
- The buyout company Sycamore Partners has hired a senior executive from Deutsche Bank AG for its lending activities. Shawn Faurot, who ran U.S. credit trading for the German lender, has resigned to join the private equity firm, according to people with knowledge of the matter.
Two issuers added € 2 billion to the € 43.28 billion already sold since Monday, making this week the busiest in sales since June, according to data compiled by Bloomberg.
- Dutch lender ABN AMRO Bank NV sold 1.5 billion euros of covered bonds with a maturity of 20 years, while the public sector issuer, the European Investment Bank, increased by 500 million euros. euros its obligation to raise awareness of the climate for 2030.
- Spain’s first green bond was the most subscribed offering on the European primary market this week, according to data analyzed by Bloomberg
- The nation attracted an order book that covered the deal 12 times
- Investors have a responsibility to lead the ethical bond market as new issuers join, structures grow and sales break records, said Salima Lamdouar, portfolio manager for sustainable strategies at AllianceBernstein in London.
- NOTE: European issuers rush to market during busiest week since June
- NOTE: Czech Green Bond deals herald increased supply from Eastern Europe
New dollar bond sales in Asia ex-Japan hit seven-week high as the pace of transactions accelerates as signals intensify that central banks around the world are heading for a decline monetary support.
- Issue rose to $ 6.3 billion from $ 6.2 billion the previous week, according to data compiled by Bloomberg
- China Evergrande Group’s wild swings in local bonds show how risky it can be to trade stressed assets in the country’s domestic market
- A drop in the price of the developer’s yuan bond due 2023 triggered trading stops on Thursday before closing a record high of 32%. The rating fell another 5.2% on Friday
- Japan Airlines Co. plans to raise around 300 billion yen ($ 2.7 billion) through subordinated bonds and loans to bolster its capital in case the coronavirus pandemic hurts travel demand for longer than expected.
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