The primary market is more or less closed, with a small amount of tidying up at the edges of club deals the only real activity.
Syndication of N&W Global Vending through bookrunners Bank of Ireland, Barclays, BNP Paribas, Calyon, ING, Intesa Sanpaolo, Natixis and SG is rumbling on. Bookrunners that are already at target hold levels are slowly collecting final commitments to the €470m debt package.
Syndicate desks are more active with waiver situations (see “Waiver wave hits Europe” on page 12), with an important consent for Ineos closed last week. The approved Ineos waiver consent features a significant level of US participation.
A source close to the deal said that a group of US investors in particular had been constructive in engaging with the waiver process, but with US investors making up just 20% of the total group, there was no realistic hope of them blocking the deal – even if they had wanted to. Institutional investors in general were supportive.
Ineos launched revised terms for the covenant waiver last week, after its initial package failed to win over lenders in a series of one-on-one meetings with management.
Initially, Ineos offered a 50bp consent fee and said it would increase margins by between 100bp and 125bp. In response to institutional investor pressure, the margins were ultimately increased by between 175bp and as much as 225bp on a second lien tranche.
In addition to the well-increased margin, banks were kept onside with the retention of an adjusted leverage covenant, to be tested at 5.25x at the end of the year, and an undertaking by the company also to hold a lender update call at the end of February.
The Ineos waiver request had initially sought a total relaxation of covenants until after April next year. At that time, the company hopes to agree a new business plan with lenders and to be in a position to make realistic trading forecasts.