(Reuters) – Some investors received token allocations on the 320 million euro ($435.05 million) leveraged loans backing the buyout of Campbell Soup’s European businesses after the deal raised more than 1 billion euros in syndication, investors said on Friday.
A handful of investors received as little as 500,000 euros each, although most investors were allocated 2-7 million euros, after their commitments were cut back heavily.
“The deal went amazingly well, only so far you can split the money,” a loan syndicate head said.
The strong response to the deal backing CVC’s purchase of Campbell Soup’s European brands, shows demand from investors for European leveraged loans.
Money has been pouring into floating rate leveraged loans in Europe and the US as investors try to hedge against possible interest rate rises.
Low allocations, which were seen regularly at the peak of the market in 2007, have been seen recently on several deals including the buyout of German metering firm ISTA as investors fight for paper.
This level of oversubscription is however unusual. 50 banks and funds were invited, almost all of which joined the deal, a source close to the deal said.
The success of the deal was attributed to the strength of sponsor CVC, the well-regarded food sector and a general lack of new leveraged loans to invest in.
“Its a highly frothy market with not many deals out there. This was a decent credit with a decent sponsor and proved popular,” an investor said.
The deal was mostly sold to European funds and shows stronger European liquidity as new Collateralised Loan Obligation (CLO) funds are issued and repayments flow in as old buyout loans are refinanced or repaid.
Arranging banks counselled against reading too much into Campbell’s result due to the lack of alternative deals to invest in.
“It’s a reasonable amount of money, but not as much as that deal would appear to indicate for the market generally,” a banker said.
The loan was arranged by BNP Paribas, ING and Rabobank.