Syndicated Scoop: A Record Breaking Acquisition Loan, and More
A record-breaking $20bn acquisition loan, investment banks grapple with junk bonds following M&A boom, and Private Debt Investor ‘Lender of the Year’ Award
5 April 2016
By Kylie Horner and Andrew Scolnic
Intralinks for Financial Services — Syndicated Scoop is a newsletter that provides a recap of the month’s top stories and insightful commentary related to the commercial and syndicated lending industry. If you’re in a hurry, click the links below or read on for a quick summary of this month’s Syndicated Scoop:
- ChemChina announcing plans for Chinese record breaking acquisition loan
- How debt backlog could clog the M&A deal machine
- Which asset manager was named Lender of The Year
This Month’s Syndicated Scoop
In February, China National Chemical Corp (ChemChina) announced plans for a $20 billion syndicated loan to help fund its purchase of Syngenta, a Basel, Switzerland-based chemicals and pesticides supplier. According to data compiled by Bloomberg, this $43bn deal would make ChemChina the world’s largest supplier of pesticides and agrochemicals, and also set a potential financing record for a Chinese acquisition. Still, many advisors are wary that the planned loan adds to an already high pile of indebtedness in China, a nation that may be too often concerned with buying up foreign technology.
Investment banks are struggling to clear a backlog of debt they lent to companies and private equity firms to fund last year’s M&A boom. To fund these deals, banks made bridge loans (short period coverages), with the intent of the loans then being replaced by long-term debt in the form of junk bonds or syndicated, leveraged loans. Banks may now risk losses if these bridge loans are “hung,” meaning that the banks are unable to sell the longer-term debt at the price they promised to the borrowers.
Congrats to Golub Capital for being named 2015 Lender of the Year (Americas), Senior Lender of the Year and BDC of the Year by Private Debt Investor, a global independent publication based in London covering private debt and private equity. Golub had a strong year across the board with $14 billion in new loan originations in 2015, of which about $8.4 billion is held on the firm’s books. Other factors mentioned by Private Debt Investor were Golub’s strong year in fundraising and hiring top talent.
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