Private equity firms are refinancing their European-based investments at a “record rate”, according to a Reuters report filed Wednesday that cites S&P data.
Through the first nine months of 2013, buyouts have refinanced €23 billion of European company debts through the leveraged loan and high-yield markets, according to the report. The total represents a 66 percent improvement over the previous year.
The flood of refinancings comes as a relief to those who anticipated the market would be incapable of handling the supposed wall of refinancings that would result from the pre-crisis buyout boom. As credit has remained available, firms have managed to amend and extend their portfolio companies’ existing debt loads, thereby avoiding €50 billion in leveraged loan maturities that had been set to expire between 2012 and 2015, according to a 2011 Clifford Chance report.
Earlier this month, BGP Investments announced that it would refinance its German residential real estate portfolio with a €406 million securitised loan. The refinancing covers approximately 60 percent of the €1 billion real estate portfolio managed by BGP Asset Management, according to a statement. The refinanced portion of the portfolio includes approximately 10,000 units, most of which are located in Berlin, Kiel and the Cologne-Düsseldorf region.
Outside of Europe, Kohlberg Kravis Roberts’ portfolio company First Data recently made headlines with its plans to repay a portion of the approximately $2 billion in 11.5 percent senior payable-in-kind notes due 2016. The remaining notes will be exchanged for 14.5 percent senior PIK notes due 2019, the company announced in a statement.