LONDON Oct 4 Some investors received token
allocations on the 320 million euro ($435.05 million) leveraged
loans backing the buyout of Campbell Soup's European businesses
after the deal raised more than 1 billion euros in syndication,
investors said on Friday.
A handful of investors recieved as little as 500,000 euros
each, although most investors were allocated 2-7 million euros,
after their commitments were cut back heavily.
"The deal went amazingly well, only so far you can split the
money," a loan syndicate head said.
The strong response to the deal backing CVC's purchase of
Campbell Soup's European brands, shows demand from
investors for European leveraged loans.
Money has been pouring into floating rate leveraged loans in
Europe and the US as investors try to hedge against possible
interest rate rises.
Low allocations, which were seen regularly at the peak of
the market in 2007, have been seen recently on several deals
including the buyout of German metering firm ISTA as investors
fight for paper.
This level of oversubscription is however unusual. 50 banks
and funds were invited, almost all of which joined the deal, a
source close to the deal said.
The success of the deal was attributed to the strength of
sponsor CVC, the well-regarded food sector and a general lack of
new leveraged loans to invest in.
"Its a highly frothy market with not many deals out there.
This was a decent credit with a decent sponsor and proved
popular," an investor said.
The deal was mostly sold to European funds and shows
stronger European liquidity as new Collateralised Loan
Obligation (CLO) funds are issued and repayments flow in as old
buyout loans are refinanced or repaid.
Arranging banks counselled against reading too much into
Campbell's result due to the lack of alternative deals to invest
"It's a reasonable amount of money, but not as much as that
deal would appear to indicate for the market generally," a
The loan was arranged by BNP Paribas, ING and Rabobank.
($1 = 0.7340 euros)
(Editing by Tessa Walsh)