Monday, 26 April 2010
Cinven Ltd. and Dubai World are leading a surge in loans to finance buyouts, as private equity firms capitalize on rising asset values to quadruple the amount they raise from banks.
Cinven started seeking about 350 million euros ($470 million) of loans to finance its purchase of medical-equipment maker Sebia SA, France’s biggest leveraged buyout in more than two years. Dubai World’s investment unit Istithmar World PJSC is arranging as much as $350 million of staple financing to attract bidders to its Inchcape Shipping Services.
“The combination of lower default rates and the dramatic revaluation in asset prices should pave the way for LBO-related loan and bond volumes to come back from the lows of the past two years,” said Peter Aspbury, London-based head of high-yield research at European Credit Management Ltd., which oversees 12 billion euros.