LONDON, Feb 16 (Reuters) - Spanish hotel room specialist Hotelbeds Group is set to raise around an extra €170m of leveraged loans to back its acquisition of US-based travel distribution company Tourico Holidays, banking sources said on Thursday.
Hotelbeds announced plans to merge Tourico with its business unit Bedbank on February 7.
HSBC, Morgan Stanley, Bank of Ireland, Deutsche Bank and UniCredit are leading the leveraged loan financing, which is due to launch for syndication to institutional investors imminently, the sources said.
The loan will add to Hotelbeds’ existing €490m term loan, which was raised in June 2016 to back its €1.165bn acquisition by Cinven and Canada Pension Plan Investment Board, from Tui Group.
That term loan pays 625bp over Euribor, with a 0% floor. It allocated with a 97.5 OID but has since traded up on Europe’s secondary loan market to above par.
It was quoted at 100.4 on February 15, according to Thomson Reuters LPC data.
An interest margin of 625bp over Euribor is far higher than what a majority of companies are paying for European term loans.
It is possible Hotelbeds will seek to reprice its existing term loan on more attractive terms, becoming the latest borrower to take advantage of the deep liquidity available in the market, the source said.
"The company is performing well and so more things are doable," one of the sources said.
Headquartered in Palma de Mallorca, Hotelbeds was established in 2001 and offers hotel rooms to the travel industry from its inventory of around 73,000 hotels in over 180 countries.
Editing by Christopher Mangham