Amadeus Lenders Want Sweeter Terms for Loan Changes

LONDON (Reuters) – Lenders to travel reservations group Amadeus have asked the company to improve the terms of a loan amendment that will give the green light to an expected initial public offering (IPO), sources said on Friday.

The request follows improvements to a similar pre-IPO loan amendment for German chemicals company Brenntag that were announced on Wednesday.

Any changes to Amadeus’ loan amendment are expected to mirror Brenntag’s concessions, which added an extra 25 bps to its proposed interest margins and fees, sources said.

Amadeus’s investors are also calling for the loan documentation to be tightened.

“There is enough momentum out there to make the sponsor want to talk to everyone,” one investor said, adding “You’ve got to make sure you get enough economics for the lenders.”

Amadeus has not officially announced plans to go public, but appointed Goldman Sachs, JP Morgan and Morgan Stanley to advise on the flotation in October.

Amadeus launched the loan amendment in early December to remove a capital expenditure covenant and offered to increase the interest margin by 125 basis points (bps) to 350-375 bps over EURIBOR and add a 50 bps participation fee in exchange.

Lenders committing by an ‘early bird’ deadline of Dec. 11 were offered an additional 25 bps fee. The final deadline for the loan amendment, which is being coordinated by JP Morgan, is on Dec. 17.

Amadeus, which has around 3.4 billion euros ($5.01 billion) of total net debt and 4.1 billion euros of total gross debt, intends to use the IPO proceeds to repay 910 million euros of the loan. This will cut its net debt to EBITDA ratio to less than 3.5 times from around 3.9 times currently.

Amadeus is controlled by private equity firms BC Partners [BCPRT.UL] and Cinven [CINV.UL] with 52.8 percent, Air France (AIRF.PA) with 23.14 percent and Iberia (IBLA.MC) and Lufthansa (LHAG.DE) with 11.57 percent each.

Nobody at Amadeus, BC Partners or Cinven was immediately available for comment. (Reporting by Zaida Espana; Editing by Rupert Winchester)