Advantage Partners wants Tokyo Star Bank investor

Advantage Partners, a Japanese private equity firm, is seeking an investor for Tokyo Star Bank to help it repay funds it borrowed to buy the bank, according to Reuters. The buy-out firm borrowed 169.6 yet ($2.04 billion) in senior and mezzanine loans to buy the bank, with the senior loans, worth 124.6 billion yen ($1.49 billion), arranged by Merrill Lynch and due in 2013. Advantage has hired Nomura Holdings Inc to find an investor.

(Reuters) – Japanese private equity firm Advantage Partners is looking for an investor for Tokyo Star Bank as it seeks ways to repay funds it borrowed to buy the bank, according to four people with direct knowledge of the matter.

Advantage Partners, one of Japan’s oldest and largest buyout firms, has hired Nomura Holdings Inc to find a new investor for the Tokyo-based regional bank, the sources said, asking not to be identified because the information is not public.

The potential investor would put money into the special-purpose company that Advantage Partners formed to buy the bank, they said.

The special-purpose company borrowed a combined 169.6 billion yen ($2.04 billion) in senior and mezzanine loans, according to Thomson Reuters LPC.

The money injected by the potential investor could be used to repay debt, the people said.

Merrill Lynch, which was later bought by Bank of America , Credit Suisse AG and other lenders, arranged the senior loans worth 124.6 billion yen. The senior loans are due in 2013.

Private equity firms typically set up a special-purpose company to conduct a buyout, in which they inject cash. Buyout firms also borrow money through the special entity.

Advantage Partners agreed to buy Tokyo Star in 2007 in a deal worth $2.2 billion, according to Thomson Reuters.

Tokyo Star’s acquisition was made at a time when lenders were willing to extend money for leveraged buyouts, which had helped push prices up.

Advantage Partners officials declined to comment.
(Reporting by Junko Fujita;Editing by Michael Watson)