Understanding investment terms & concepts

Lpc banks line up #U00a3850m loans for parkdean resorts sale

Nov 9 Banks are preparing up to £850m of leveraged loans to back a potential sale of British holiday park operator Parkdean Resorts, banking sources said on Wednesday. Parkdean, owned by Electra Partners and Alchemy Partners, was put up for sale earlier this year, with Rothschild hired to manage the sale process, the sources said. They are hoping to fetch a valuation of £1.4bn-£1.5bn, one of the sources added. Bids were due in the first round of an auction process this week, which has attracted a lot of interest from private equity firms, banking sources said.

The financing will include up to £750m of senior term loans and second-lien loans, equating to around 6.25 times Parkdean's approximate £120m Ebitda, the sources said. The financing will also include a revolving credit facility.

In 2015, Park Resorts merged with rival Parkdean Holidays, in a transaction that gave the enlarged company an enterprise value of £960m. The merger was backed with a £530m seven-year term loan B, led by Barclays, JP Morgan, RBS and SMBCE, according to Thomson Reuters LPC data.

That loan also paid £21m to departing shareholders and management and repaid £95m to owners Electra, which retained a 45% stake in the combined business. In 2012 Electra invested £70m in the then struggling Park Resorts by buying senior debt with a face value of £130m. In 2013, Electra took a 54% stake in the company following a refinancing and debt for equity swap. Electra invested a further £62m to grow the business and support acquisitions of South Lakeland Parks in 2013 and Southview and Manor Park in 2014, and in acquiring a further interest in Park Resorts preference shares in April 2015, around the same time it acquired Summerfields Holiday Park in Norfolk. Electra and Alchemy declined to comment.

Lpc cvc and temasek to back alvogen buy with existing $700m loan

European private equity fund CVC and Singaporean sovereign wealth fund Temasek are seeking to keep an existing $700 million leveraged loan financing for Alvogen in place to back their acquisition of a controlling stake in the pharmaceutical firm, banking sources said on Thursday. CVC and Temasek agreed to buy the stake in a deal valuing the company at around $2 billion, it emerged earlier this week.

Existing lenders to Alvogen have been asked to consent to a change of control provision, which would allow the seven-year term loan to remain in place, despite a change in ownership. Typically when a company is sold it triggers an automatic debt repayment.

The $700 million term loan was raised in April to refinance existing debt and fund general corporate purposes. The deal was led by Jefferies, Goldman Sachs and SunTrust and pays an interest margin of 500 basis points (bp) with a one percent Libor floor, according to Thomson Reuters LPC.

As part of the request, 101 soft call protection, which was put in place in April for six months will be reset. Lenders have been offered a 12.5bp consent fee. Alvogen specializes in developing, licensing and manufacturing generic pharmaceutical products.

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