Park Square to sell largest BWIC since financial crisis

LONDON, Nov 4 (LPC) - A €416m-equivalent loan and bond portfolio from Park Square has hit the secondary market and is set to stir a lot of attention as the largest auction of this type to take place since the financial crisis, banking sources said.

The portfolio hit the market in a Bids Wanted In Competition process, which sees potential buyers submit best bids by an auction deadline of November 7.

BWICs have proved a popular way to sell loans and bonds in bulk as it proves best price execution. Around seven BWICs came to the market in October and sold successfully as investors scramble to put money to work and invest in paper, amid low primary supply.

At €416m, this is the biggest BWIC traders can remember to date.

“It is massive, the biggest I’ve seen,” a senior trader said.

The sale comes as a separately managed account client rotates out of loans, two of the sources said.

Park Square declined to comment.

A number of SMA investors have been cautiously investing given where the credit cycle is and have been redeeming cash to invest in other asset classes where they see value, such as high yield or equities.

“Maybe the SMA has had a redemption themselves. Usually it is that they have found something better elsewhere in the other asset classes because there is better value or because they are derisking and cautious of highly leveraged risk,” the senior trader said.

A senior investor added: “Another anecdotal sign that we are nearing the end of the cycle?”

The €416m-equivalent BWIC comprises 46 names across various tramches denominated in euro, dollars and sterling.

Some of the larger positions include €15.5m of French roofing and building solutions provider Terreal’s TLB2; €15m of Springer’s TLB; €22m of Swedish alarms company Verisure’s TLB and senior unsecured notes; €17.8m of Swedish enterprise software firm IFS’s TLB; and US$18.3m of workforce management software and services company Kronos’ TLB and second-lien. (Editing by Christopher Mangham)