Nordic credit remains more readily available

unquote" data didn't record any all-equity transactions in the Nordic region for the second half of 2011 and the first quarter of 2012. By comparison, such deals accounted for more than a quarter of all European buyouts in H2 2011 before falling to around 10% in Q1 this year.

In contrast to the wider European situation, debt has been increasingly available for funding Nordic buyouts since 2009, even when bailout packages for strained Southern European countries were being negotiated in H2 2010 and H2 2011.

Emergence of a local high-yield market
"Banks remain very well capitalised and have no reluctance to lend, especially to good sponsors," says Patrick de Muynck, a senior partner at EQT in Stockholm responsible for the firm's debt-raising activities. "Leverage is readily available for the mid-market," he adds. "However, it is increasingly combined with high-yield bonds for larger transactions – a trend largely explained by the drying up of the CLO markets, and which favours the creation of a pan-Nordic high-yield market of growing interest to local banks." Simon Wakefield, global head of acquisition finance at SEB Bank, agrees: "The local high-yield market is very much on the rise, and SEB is actively involved in talking to potential issuers and investors."

But refinancing portfolio companies, which has been on the wane since 2008, will be affected by the same lack of CLOs: "The fight for yield will not cause problems for performing companies, to the contrary, but will affect the ones that are more 'borderline'. Eventually, refinancing debt will be a question of price," says de Muynck.

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