RLPC-Informa sale prospects boosted as debt finance secured

LONDON, Sept 2 (Reuters) - Private equity firms Carlyle Group [CYL.UL] and Providence Equity Partners have secured a financing package backing the buyout of British publishing and events group Informa (INF.L), improving the chances of a successful sale, senior banking sources said on Tuesday. The sale, which would be one of the largest leveraged buyouts to be assembled since the credit crunch struck in mid 2007, has been delayed by the difficulty of securing financing.

Carlyle and Providence have now assembled a group of around twelve banks to provide a leveraged loan of around 1.5 billion pounds that will finance the purchase, along with a large equity contribution, several senior bankers said. "On the Carlyle side the financing is in place. The financing is already largely done," a senior leveraged banker said.

Helman and Friedman, which was also part of the consortium including Carlyle and Providence, has dropped out, sources said.

Many of the banks backing the Carlyle consortium's bid are Informa's relationship banks, and their involvement and difficult loan market conditions are said to be significant hurdles for would-be bidders to overcome.

"These banks are existing lenders to Informa - the loan market is with the Carlyle tree," the senior leveraged banker said.

Another consortium led by Blackstone acting with Investment Corporation Dubai was said to be competing for the company but bankers said that it would be difficult for any other consortium to raise financing.

"It would be a massive challenge to raise financing knowing how difficult it was for Carlyle to get this group together," the senior leveraged banker said.

The twelve banks backing the Carlyle consortium are providing a mix of underwriting commitments and take and hold commitments, sources said.

"It's effectively a very large club loan," another banker said.

Leverage on the loan is said to be around 5.5 times total debt and the package includes senior and mezzanine debt, a leveraged syndicate head said.

The banks have not underwritten the mezzanine tranche, which has been sold directly by the sponsor and already has a couple of big commitments, he added.

The twelve banks are seeking to reduce their exposure before the year end and the debt package backing Carlyle and Providence's bid is expected to be launched to a wider syndication in early September, several sources said.

Raising the additional funds to reduce exposure is not a foregone conclusion as participant banks are already facing pressing year-end balance sheet constraints, bankers said

"Having a group of banks at the top makes the next stage easier, but the balance to raise is not a synch," a third leveraged specialist said.

(Editing by Erica Billingham)