March 17, 2014 / 12:55 PM / 4 years ago

RLPC-Bankers working on AA debt refinacing

LONDON, March 17 (Reuters) - Bankers are working on proposals to refinance around 1 billion pounds ($1.66 billion) of loans for the Automobile Association (AA) that could allow the British motoring services firm to cut its borrowing costs, bankers said on Monday.

Parent Acromas has also received a number of unsolicited proposals from would-be buyers, the company said in a statement last Friday [ID: nL6N0MC0GS].

A sale may pre-empt the loan refinancing, bankers said.

Acromas, which is owned by private equity firms Charterhouse, CVC and Permira, was created in 2007 at the peak of the buyout boom by the 6.2 billion pounds merger of the AA and over 50s insurer Saga.

Charterhouse declined to comment. Acromas, CVC and Permira were not immediately available to comment.

The AA completed a wider 3 billion pounds debt refinancing last year in the loan and bond markets, which paved the way for a breakup of the group and a possible listing of Saga and sale of the AA.

The AA became an investment-grade company at that time after its debt was restructured in a whole-business securitisation.


Bankers are working on proposals to refinance the AA’s loans on more attractive terms to take advantage of high levels of market liquidity and falling loan pricing, bankers said.

If the loan refinancing goes ahead, it could be part of a wider debt reshuffle. Some of the loans could be refinanced in the bond market or additional debt could be raised to pay shareholders a dividend, the bankers added.

The AA’s 3 billion pounds loan and bond financing last year was arranged by Deutsche Bank, Royal Bank of Scotland, Bank of America, Bank of Tokyo-Mitsubishi UFJ, Barclays Bank, HSBC Bank, Lloyds TSB Bank, Royal Bank of Canada and UBS. ($1 = 0.6014 British Pounds) (Editing by Tessa Walsh)

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