HSBC and private credit fund manager Bain Capital Credit have combined on a unitranche loan used to refinance the existing debt of environment specialist service company Adler & Allan.
Private equity firm Lloyds Development Capital (LDC) acquired a stake in the company in 2014. HSBC has been the lender to the UK-headquartered company for more than a decade.
The partnership is unusual as conventional UK unitranche structures involve the bank providing the revolving credit facility, while the debt fund serves as the sole lender. However, under the framework of this transaction both HSBC and Bain are lenders to the company.
Adler & Allan was established almost 100 years ago and owns a number of subsidiaries including AJ Bayliss, E&S and WES. Among its many services, it provides assistance in emergency situations, waste services and oil distribution.
Both firms declined to provide further details on the coupon, but market participants have noted that unitranche structures are being priced at around 8.5 percent.
The loan amount was not disclosed.
“We are very pleased to be backing Adler & Allan once more, and with an innovative unitranche capital structure which reflects the strength of the business,” said James Scholes, director at HSBC.
“We look forward to a lending relationship spanning many years,” said David Brooks, director at Bain.
Funding for the transaction comes from Bain’s global direct lending fund managed under its business development company unit, which recently surpassed the $1 billion fundraising mark. The global investment platform targets companies with an EBITDA between $10 million and $150 million.
Refinancing has driven much of the activity for debt funds recently as borrowers take advantage of the huge amount of liquidity in the market. Almost half of the leveraged loan activity in 2016 was the result of opportunistic recapitalisations and refinancings, according to a report by advisory firm Marlborough Partners.
That is a trend that has continued into this year as M&A volumes remain muted and debt funds are under pressure to deploy capital. In January, Permira supported the refinancing of LDC-backed Away Resorts for an undisclosed sum and it was also behind the £375 million ($486 million; €426 million) debt package supplied to Soho House. Earlier today, Terra Firma announced the £4 billion refinancing of its UK housing platform Annington Group with £400 million sourced in bank loans.
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