August busiest for European buyouts
Several private equity firms, amongst them BC Partners Ltd and Cinven Ltd, reported to have raised EUR3.1 billion or USD4.1 billion in loans for the month of August. This is the busiest the European market has been since 2007 and this clearly indicates that the economic bottom has been reached.
BC Partners received USD2.6 billion in covenant light loans for the purchase of German academic publishing firm Springer Science and Business Media GmbH. Cinven, on the other hand, purchased Host Europe Group Ltd, the Internet domain and hosting company through a GBP255 million package of senior loans. Both figures were reached through Bloomberg compiled data. The investor demand for high yield debt allowed borrowers to put together a fund package that doubled the previous yield in August 2012. Bloomberg further reports another EUR7.2 billion worth of loans signed in July of 2013.
The increasing consumer confidence in the European economy as well as concern for the increasing interest rates would probably help hedge fund firms finance more buyouts after another USD4.36 billion worth of transactions were announced for September.
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