June 12, 2017 / 12:23 PM / 2 months ago

Intrum Justitia out with year's biggest euro high-yield deal

LONDON, June 12 (IFR) - Intrum Justitia is out with a jumbo €3bn-equivalent trade, set to be this year's largest in the European high-yield market.

Though there were two M&A issues last week, Intrum Justitia, with its size and expected Ba2/BB+/BB ratings, appears to be the kind of new issue investors have been crying out.

Most of the proceeds will refinance existing debt for the Swedish credit management services company's merger with Norwegian peer Lindorff.

"It's exactly what the market wants," said a lead banker.

"It's new supply, M&A related, and in that rating spectrum where you're not taking on a lot of credit risk."

The borrower is planning three euro tranches: a minimum €300m 5NC1 FRN, a minimum €500m 5NC2 fixed, and a minimum €500m 7NC3 fixed. It is also looking to sell a minimum €300m-equivalent 5NC1 FRN in Swedish kronor.

The biggest deal so far this year was from Quintiles IMS, which raised €1.425bn through an 8NC3 senior note in February.

Of the proceeds from Intrum Justitia's bond, €2.4bn will repay debt taken out in relation to the merger.

"That's why I think this deal is going to have a really nice technical around it. More than two thirds of the deal is in the hands of people who know about it, so it is rolling in a lot of existing money," said the banker. Goldman Sachs (B&D), JP Morgan, Morgan Stanley, Danske Bank, Deutsche Bank, DNB Markets, Nordea, Nykredit, Swedbank and UBS are joint bookrunners. (Reporting by Yoruk Bahceli, Editing by Alex Chambers and Julian Baker)

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