Xella’s €970 Million Loan Completed

LONDON (Reuters) – A €970 million ($1.25 billion) loan backing the buyout of German building materials company Xella has been closed and signed as a club deal, banking sources said on Wednesday.

Arranging banks provided the loan after wider syndication was cancelled due to adverse market conditions, the sources said.

German conglomerate Haniel Group sold Xella to sponsors PAI and GS Capital Partners in July this year for an undisclosed amount.

In common with other leveraged loans in the market, sell-down of the financing has been impacted by the credit market crisis. Banks’ reluctance to lend means wider sell-down of deals has been severely curtailed and deals have been provided by senior banks on a club basis.

Xella’s loan, which was launched to wider syndication in September, is led by BNP Paribas, Calyon, LBBW, Royal Bank of Scotland and UniCredit.

Erste Bank, KfW, Mediobanca, Commerzbank, HSH Nordbank, WGZ and GE Capital joined the transaction during a senior phase.

Sources close to the deal did not rule out the possibility of further syndication when market conditions improve.

Xella designs, produces and distributes wall and insulation materials such as autoclaved aerated concrete blocks and panels, calcium silicate blocks, mineral insulation boards, gypsum fibre and cement-bonded glass-fibre boards. (Reporting by Alasdair Reilly; Editing by Paul Bolding)