Search results for

THE DEBT package backing the long mooted leveraged buy-out of Friedrich Gröhe finally emerged this week, as lead arrangers Dresdner Bank Frankfurt and HypoVereinsbank at last took the plunge and launched the deal to co-arrangers. Banks are offered tickets of DM125m for a fee of 87.5bp or DM75m for a fee of 67.5bp. Compared to the Ineos Acylics and the Accordis deals in the UK, the fees appear light.

There was significant dollar denominated issuance this week, but it had little impact on swap spreads. At the end of the week, 10 year spreads were at about 89.5bp over the August 2009 Treasury - exactly where they had been last Thursday. The five year mid market was at 75.75bp and the three year was at 71.5bp.

RUMOURS CONCERNING France Télécom's plans for the loan market persist thanks to the French telecom group's latest German acquisition. On Monday it paid Eu7.4bn for a 60.25% stake in E-Plus Mobilfunk put up for sale by Vega and Viag, only two weeks after its purchase of Vodafone AirTouch's 17.24% stake in E-Plus.

GMAC Canada issued a $200m Euro-MTN due January 2005 via Merrill Lynch and ABN Amro. Swap market sources close to the borrower said that the proceeds of the issue had been swapped to Canadian dollars. A treasury spokesman for the borrower confirmed that this was the case, but declined to elaborate on whether the ultimate destination was floating or fixed. The notes yielded 7.06% all-in, and swap bids to January 2005 were about 6.75%. This suggested a cost in floating US dollars of about Libor plus 30bp or more.

Market commentary:

Funding officials from the Republic of Hungary were soliciting bids this week for a euro issue designed to pre-fund some of the Baa1/BBB/BBB rated sovereign's 2000 liabilities. Hungary completed its $1.9bn overseas bond funding target for this year by the early June, following the launch of two euro denominated Eurobonds and one dollar denominated global bond.

India Potential sub-underwriters have been approached by arrangers ANZ Investment Bank and HSBC to join the offshore senior debt facilities for the $1.4bn Vizag power project in Andhra Pradesh.

The State of Israel broke new ground for the Middle East this week when it became the first sovereign from the region to tap the sterling bond market. In an opportunistic piece of financing the A3/A-/A- rated borrower raised £100m of 35 year money through a private placement solely lead managed by Warburg Dillon Read.

Brazil ABN Amro Bank NV, Bank of America and WestLB have been mandated to arrange a refinancing to replace the $1.75bn two year term loan for BellSouth Telecomunicaciones-Brazil (BCP) in March 1998. That deal was arranged by eight banks: Merrill Lynch, JP Morgan Securities, ABN Amro Bank, BT Alex Brown, Chase Securities, Nationsbank, Wachovia Bank and WestLB.

* Brazil's Banco Braseg took advantage of a limited but continuous bid for Brazilian bank paper this week by issuing a $65m one year Eurobond led by Crédit Lyonnais. Braseg and other banks like Banco Safra and Brascan have been luring European retail investors into their deals in recent weeks by offering huge yields on very short dated paper.

Ireland's largest mortgage lender, Irish Life & Permanent Plc, securitised its domestic home loans for the first time this week, in a Eu600m deal that is the biggest securitisation of Irish assets. Before its merger with Irish Life earlier this year, Irish Permanent had taken its UK mortgage portfolio off balance sheet with a £400m securitisation arranged, like this week's deal, by Greenwich NatWest. Launched last November, Auburn Securities 1 parcelled loans originated by Capital Home Loans Ltd, a UK non-bank lender acquired by Irish Permanent in 1996.

Europe's growing municipal market is set to welcome yet another new name with the signing of a Eu500m Euro-MTN programme for the Italian region of Marche. Located in central Italy, Marche is a small but prosperous region which has until now fulfilled its financing needs in the domestic bank market.