LBO debt likely to make 2005 a reco

According to Standard & PoorÂ’s leveraged commentary and data, the total volume of issuance of LBO debt in Europe recently hit EUR 18.2bn, up EUR 17bn from the previous week. If this pace of issuance continues, it will easily make 2005 a record year, not least because there has already been a bonanza of deals between January and June this year. The data suggests that leveraged loan finance primary volume totalled EUR 56bn in the first half of this year in Europe, compared with EUR 65bn during the whole of 2004. This boom in issuance reflects the continued appetite for leveraged buyouts in Europe. The data also shows that in the first half of the year, the average debt to earnings before interest, tax, depreciation and amortisation ratio for all European deals was 5.5x, against the 2004 average of 4.6x. The sheer volume of loan syndications may be leaving some investors more discriminating about which deals they choose to subscribe to. There is currently little sign that investors are losing their appetite for financing these deals however. In fact, the levels of leverage may still be rising.

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• Topics
• Buyouts
• France