March 16, 2017 / 12:36 PM / 9 months ago

LPC-Tipico slashes pricing on increased €700m loan

LONDON, March 16 (Reuters) - Germany’s largest sports betting group Tipico has managed to secure the largest pricing reduction in Europe’s leveraged loan market, shaving 300bp off of the interest, banking sources said.

CVC acquired a majority stake in Tipico last year, backed with a €645m debt financing raised in May, including a €620m term loan that paid 550bp over Euribor with a 1% floor, according to Thomson Reuters LPC data.

Since then, pricing in Europe’s liquid leveraged loan market has tightened significantly and sponsors have been conducting repricings, refinancings and dividend recapitalisations across the board to make portfolio companies more attractive.

However, the 300bp reduction secured by Tipico outstrips the recent reductions achieved in Europe’s leveraged loan market, as investors accept increasingly aggressive terms amid a lack of new deals, in a bid to keep cash invested.

Tipico’s latest financing has increased the term loan by €80m to €700m and managed to knock 200bp off the interest margin to 350bp over Euribor and removed the 1% Euribor floor to 0%. The repricing cuts deeper than initial launch guidance of 375bp-400bp.

The loan is set to allocate shortly on Europe’s secondary loan market at par.

Morgan Stanley was sole global coordinator, alongside bookrunners Bank of Ireland, Credit Agricole, Nomura and UniCredit.

“It just shows how much you can do in this market. Maybe they paid too much when they first raised it, but it is a tricky credit given the sector. Maybe the market is just stupid,” a senior loan banker said.

Tipico operates online and mobile portals, as well as more than 1,000 betting shops. (Editing by Christopher Mangham)

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