LONDON Nov 7 Fund managers including
Intermediate Capital Group (ICG) have put nearly 1.2
billion euros of loans up for sale in Europe's secondary loan
market since September, according to Thomson Reuters LPC data.
A 180 million euro loan portfolio belonging to investment
firm and asset manager ICG is the latest sale designed to take
advantage of a more positive macroeconomic climate and strong
investor demand for a limited supply of new loans.
Other recent loan sales include portfolios for leading asset
managers Alcentra and Carlyle.
"It's a very good time to sell, the market is strong and
there's massive demand for assets. There's capital to be spent
and no natural supply from new issue. Any volume like this in
the secondary market is to be welcomed," a loan trader said.
Many of the loans are being bought by cash-rich
institutional investors that have had little to buy in the
primary European leveraged loan market due to low levels of M&A
activity and new buyouts.
Banks have also been buying loans to put into warehouses for
new Collateralised Loan Obligation (CLO) funds prior to launch.
Some fund managers are also liquidating old CLO funds and
creating new vehicles and selling excess loans.
"A lot of buyers are looking to put cash to work. Banks and
institutions are throwing out blocks of loans to sell and
benefiting from market conditions," an investor said.
UP FOR SALE
ICG's loan portfolio sale consists of 24 loans with
multiple tranches and currencies including Irish telecom Eircom
, French clothing retailer Vivarte and
frozen food retailer Iglo Group.
ICG was not immediately available to comment.
Alcentra is also selling 40 million euros of loans this
week. Carlyle sold a 290 million euro loan portfolio in October
as it wound down two CLO funds to repay equity investors.
Another 35.6 million pounds loan portfolio was sold in
October which included a 25 million pounds piece of
pharmaceutical company Alliance Boots and a $17.2
million piece of Canadian publisher Nelson Education's
ICG also auctioned a 72.9 million pounds portion of UK
hygiene services provider PHS Group in September.
The loans for sale are fetching good prices in competitive
auctions. A 9.1 million euro piece of Eircom traded at 107.5 on
Monday, higher than a quote of 104 according to LPC data.
Around 18 million euros of French phone directories company
Pages Jaunes loans also traded this week, along with
a 3.3 million euro piece of Swedish mattress maker Hilding
Other auctions in the last few weeks include loans for
peripheral companies such as Spanish media firm Prisa
and retailer Cortefiel.
Loans for companies heading towards restructuring are also
attracting interest from distressed investors, including a 44
million euro sale of loans for Europe's biggest parking
management firm Apcoa
(Editing by Tessa Walsh)