RLPC-Amadeus amends loan buyback bid before waiver vote

By Tessa Walsh

LONDON, Sept 29 (Reuters) - Travel reservations company Amadeus Global Travel Distribution has amended the terms of a waiver allowing it to buy back its leveraged loans at a discount in the beaten-down secondary market, senior banking sources said on Friday.

The amendment is intended to address the concerns of lenders, who will vote tomorrow on the waiver to Amadeus' existing 5.2 billion euro ($7.54 billion) loan to allow it to buy back part of the loan from its excess cashflow of around 600 million euros, the sources said.

Amadeus has addressed two issues that saw pushback from investors. The company will now surrender voting rights over the debt that it buys back, instead of voting with the majority of the syndicate, and will also cap the amount of any buyback at 320 million euros, the sources said.

Amadeus' is the first loan buyback to adhere to guidelines issued by industry body the Loan Market Association (LMA) which aim to make buybacks fairer and more transparent by offering all lenders the chance to sell their debt and only earmarking excess cash for buybacks.

The LMA published a revised version of its leveraged finance primary document on Monday setting optional criteria for buybacks covering debt purchases by private equity firms and the companies they own.

"The waiver was in line with the LMA before, now its being made more lender-friendly," a source close to Amadeus said. Slumping secondary loan prices are currently favouring loan buybacks. Average bids on Europe's top 40 leveraged loans are at a record low of 84.09 percent of face value, according to RLPC data.

The buybacks save companies money on principle repayments and private equity owners also benefit indirectly as paying down debt increases the equity value in the companies they have invested in.

Amadeus' loans are trading at 79-81.5 percent of face value, potentially allowing the company to save nearly 20 percent between buying the discounted paper and repaying it at face value or par.

Amadeus is owned by a special purpose vehicle, which is 52 percent owned by private equity firms BC Partners and Cinven. Airlines Air France (AIRF.PA), Iberia (IBLA.MC) and Lufthansa (LHAG.DE) - which previously controlled Amadeus -- also hold a stake in the vehicle. (Reporting by Tessa Walsh; editing by John Stonestreet)