| LONDON, March 25
LONDON, March 25 Blackstone is set to take a 320
million euro ($441.07 million) dividend payment from its Dutch
trust and corporate management business Intertrust Group a year
after acquiring the business, banking sources said on Tuesday.
A dividend recapitalisation, a process that refinances a
company's existing borrowings and adds debt to it to enable a
dividend to be taken, was launched on Monday for Intertrust.
Deutsche Bank, Bank of America Merrill Lynch and Nomura are
running the process. [ID: nL5N0ML41R]
Dividend recapitalisations have proven popular in Europe's
leveraged loan market due to a lack of M&A activity as it allows
owners to realize some value in their investment.
A bank meeting is due to take place in London on Wednesday
to showcase the deal to new and existing lenders and commitments
to the deal are due by April 4, the sources said.
Blackstone declined to comment.
As part of the recapitalisation, Intertrust's existing 540
million euro term loan B will be refinanced and increased by 42
million euros to 582 million euros. The company will also raise
a new 255 million euro second-lien facility, the sources said.
Second-liens have not been seen in Europe since the onset of
the financial crisis but have been making a return in recent
financings, providing a welcome relief to institutional
investors in search of yield amid tighter pricing on senior debt
due to a supply/demand imbalance. Issuers like it because it is
cheaper than mezzanine and has less restrictive call periods
than high-yield bonds.
Around 70 percent of Intertrust's new loans will be
denominated in euros with the rest in dollars.
The dividend recapitalisation will take Intertrust's debt to
earnings to around 4.8 times on the senior loans and 6.7 times
in total from a current level of 4.5 times. After Blackstone's
buyout, debt to earnings stood at 5.3 times, the sources added.
"Intertrust is a very cash generative business which
deleverages very quickly," one of the sources said.
Blackstone agreed to buy Intertrust from Dutch private
equity firm Waterland for around 675 million euros in 2012,
backed with a 512 million euro loan. It raised an additional 200
million euro add-on facility in 2013 to fund Intertrust's
acquisition of fiduciary, management and administration services
provider ATC Group from HgCapital.
Founded in 1952, Intertrust's core business is to set up and
manage holding companies.
($1 = 0.7255 Euros)
(Editing by Christopher Mangham)