Hayfin Capital Management hires Moravek for U.K. origination

Private debt fund manager Hayfin Capital Management has hired Paul Moravek as a managing director in its U.K. origination team.

Moravek, who begins work at the firm next week, joins from VentureFounders, a U.K.-based equity crowdfunding platform which he co-founded in 2013.

Previously he worked in leveraged finance at Merrill Lynch for nine years, having joined in 2004 from J.P. Morgan.

Hayfin recently bid farewell to two managing directors: Paul Levy, who joined investment banking boutique GreensLedge, andRinaldo Olivari, who left to launch his own financial technology firm.

Jeff Sockwell, also a managing director and co-head of origination at the firm had earlier left the firm in May to the U.S. He continues to be an advisor to the firm.

The moves follow a recapitalisation at Hayfin whereby the firm sold the portfolio of owned assets to Australian sovereign wealth fund The Future Fund, one of its shareholders. Proceeds from the €705 million sale were used to fund a dividend to investors. In a statement at the time of the deal in May, Hayfin said it would continue to manage the assets on behalf of The Future Fund alongside other third-party funds and separate accounts. Hayfin reaffirmed its commitment to its role as a European direct lending platform and said it would look to expand it across Europe.

The firm’s management team increased their stake in the business following the recap, while the firm’s institutional backers – private equity group Towerbrook Capital Partners, The Public Sector Pension Investment Board, The Ontario Municipal Employees Retirement System (OMERS), and The Future Fund – reduced their shareholdings pro-rata. – Oliver Smiddy


GE selling Antares to Canada pension fund CPPIB as part of $12B deal

GE will sell Antares Capital to Canada Pension Plan Investment Board (CPPIB) as part of a $12 billion transaction.

The sale includes a $3 billion bank loan portfolio. Antares Capital will operate as an independent business, and retain the name. The sale is expected to close in the third quarter.

Managing partners David Brackett and John Martin, who have led Antares since its formation, will continue to lead the stand-alone business. CPPIB will retain the Antares team, a statement today said.

Stuart Aronson, the CEO of GE Capital Sponsor Finance, will stay at GE Capital.

The sale accounts for $11 billion of ending net investment. GE Capital has announced sales of roughly $55 billion, and plans to complete $100 billion of sales this year.

The Senior Secured Loan Program (SSLP) will continue to operate for a time prior to the closing of the deal, giving “Ares and CPPIB the opportunity to work together on a go-forward basis.” The SSLP is a joint venture between GE Capital and Ares Capital.

“If a mutual agreement is not reached, it is GE Capital’s intention to retain the SSLP in the future so that it can execute an orderly wind down of this program ($7.6 billion GE Capital investment, $6.1 billion of which is attributable to Sponsor Finance).”

A similar strategy holds for the Middle Market Growth Program (MMGP), which is a joint venture between affiliates of GE Capital and affiliates of Lone Star Funds, GE said. That program accounts for $600 million of GE Capital investment.

GE announced in April it would divest GE Capital, including its $16 billion sponsor finance business. GE Antares specializes in middle market lending to private-equity backed transactions.

GE Capital has long reigned as the dominant player in the middle market lending, defined by LCD as lending to companies that generate EBITDA of $50 million or less, or $350 million or less by deal size, although definitions vary among lenders.

In May, Ares Capital CEO Kipp deVeer said Ares plans to continue supporting sponsors and businesses, either directly or through a new program with a new partner. This new partner may be looking to expand their lending to the middle market, or be entering the business for the first time.

He cautioned that there was no guarantee that Ares would reach a deal. In recent weeks, Ares has been working with potential parties, including non-U.S. regulated banks and non-banks such as asset managers, insurance companies, and combinations thereof.

GE Capital is not allowed to unilaterally sell the loans in the SSLP. If no partner is found, the SSLP could be gradually wound down through repayment of the loans. The weighted average life of the SSLP loans was 4.3 years at the end of the first quarter. – Abby Latour

Follow Abby on Twitter @abbynyhk for middle-market deals, leveraged M&A, distressed debt, private equity, and more



Six Degrees, Stage Entertainment on LCD European mid-market auction watchlist

LCD has compiled a watchlist of auction situations in the European mid-market to track upcoming M&A deal flow in this space, and will update the list fortnightly. It will focus on deals for which the anticipated enterprise value is roughly €400 million and below, or the debt is expected to be roughly €200 million and below. The list is attached as an Excel spreadsheet (note, LCD’s large-cap auction calendar can be found here).

Penta Investments is looking to sell cloud services provider Six Degrees Group, according to market sources. In 2011, Penta invested £40 million in three platform businesses in the connectivity, data-centre and unified communications sectors, before subsequently making further bolt-ons. The firm has mandated DC Advisory to help run the auction, which has now progressed to the second round.

CVC Capital Partners is poised to acquire Stage Entertainment, a U.K.-based theatre operator. The buyout firm is in exclusive talks with the company’s founder about a deal that could value the company at as much as €400 million, according to reports. CVC is understood to have fought off a rival bid from Providence Equity Partners-owned Ambassador Theatre Group.

Dutch buyout firm Waterland Private Equity has mandated Grant Thornton to help it find a buyer for discount dining club Tastecard, according to reports, which suggest the company could fetch roughly £100 million. If the sale is successful, it would represent a quick flip for Waterland, whose portfolio company Didix only purchased Tastecard in September last year.

Several processes have however reached fruition in recent weeks, or been pulled altogether.

U.K.-headquartered special effects company The Foundry was sold by The Carlyle Group to HgCapital in a deal valued at £200 million. HgCapital financed the deal with equity initially, and will now look to the refinance the business with new debt in the coming months, according to sources.

Poundworld has also been sold, as expected, to U.S. buyout firm TPG in a £150 million deal.

CCMP Capital-owned Pure Gym snapped up rival LA Fitness in a deal thought to be sized at £60-80 million. LA Fitness had been put up for sale by a consortium of lenders that acquired it through a debt-for-equity swap in 2013. The deal has yet to be approved by the competition authorities.

The management team of U.K.-based services group SimplyBiz meanwhile are understood to have shelved plans to sell or float the company. The business had attracted interest from around five private equity firms, understood to include Lyceum Capital and Sovereign Capital, and had carried a mooted valuation of roughly £100 million. The firm’s managing director, Neil Stevens, did however reveal the company was looking at alternative funding options that keep the management team and shareholder base “consistent”, suggesting some sort of debt financing is likely in the near future. – Oliver Smiddy


CLO issuance in May hits 11-month high in Europe, dwindles in US

CLO issuance, US vs Europe

It was a tale of two markets for CLO volume in May. The European market took a large step forward with €2.4 billion from six transactions, while in the U.S., an underwhelming $5.66 billion of issuance added further evidence that CLO formation will be compromised while loans remain in short supply.

Putting this into perspective, May volume was the highest in Europe since June 2014, according to LCD. And with at least four transactions in the marketing phase right now, June will likely be another solid month.

Meanwhile, in the U.S. May’s supply is the lowest level since January, when $5.15 billion of deals priced, and is roughly a third of March’s record $16.24 billion. – Sarah Husband

Follow Sarah on Twitter for CLO market news and insight.

You can read more on how the CLO market works here.

This story is taken from a longer piece of analysis, available to LCD News subscribers here. 


Apax Partners to launch listed fund investing in equity and debt

Private equity group Apax Partners is to launch a listed investment vehicle that will invest in public and private debt, as well in private equity deals backed by its traditional buyout funds.

Apax Global Alpha (AGA) is hoping to raise €250 million when it debuts on the LSE next month. It has already secured commitments from a group of cornerstone investors totalling €135 million so far, Apax said.

The fund will aim to invest in private equity investments made by Apax funds, as well as committing capital to the funds themselves. It will also invest in public and private debt opportunities derived through Apax’s insights from its private equity activities, which Apax calls “derived investments”. Once fully invested, the fund will aim to be equally invested between private equity and derived investments. Debt investments will include sub-investment grade and unrated debt instruments, Apax said.

Prior to admission, the fund will acquire PCV Lux, a fund formed in 2008 as an investment vehicle for Apax employees. PCV’s NAV as of March 31, 2015 stood at €611.1 million, and PCV’s assets include investments in and commitments to four Apax buyout funds, as well as investments in debt and equities.

The fund is targeting an annualised total shareholder return of 12-15% (net of fees and expenses), including a dividend yield of 5% of NAV once fully invested. – Oliver Smiddy


Panter joins Oak Hill as portfolio manager

Lucy Panter has started a new role at Oak Hill Advisors, according to market sources. She has joined as a portfolio manager in the performing loan business, and her hire comes as part of Oak Hill’s drive to beef up its business lines across the board.

Panter was previously a portfolio manager at GoldenTree Asset Management, responsible for overseeing the firm’s European CLO business, and also covered the firm’s European consumer, retail, and leisure investments.

Prior to joining GoldenTree in September 2005, Panter held positions at P. Schoenfeld Asset Management, and at Goldman Sachs in New York. – Sarah Husband

twitter icon Follow Sarah on Twitter for CLO market news and insight.


HSBC hires Morrish and Heath for loans trading team

Grieg Morrish and Mark Heath have left BNP Paribas and Commerzbank, respectively to join HSBC’s loan trading team. Both will be joining late summer.

Morrish, who will be a crossover loans trader at HSBC, joins from BNP Paribas’s secondary loans trading team. Morrish left his post at Invesco in 2011 to move to BNP Paribas. Heath was previously a senior loan trader at Commerzbank, and will be joining HSBC as a par loan trader. – Nina Flitman


Altice buys 70% of Suddenlink; new debt financing to be raised

Altice has announced that it will acquire 70% of Suddenlink from BC Partners, CPP Investment Board and Suddenlink management, with BC Partners and CPP Investment Board retaining a 30% stake. The purchase values Suddenlink at an enterprise value of $9.1 billion and 7.6x synergy-adjusted EBITDA. J.P. Morgan, PJT Partners and BNP Paribas acted as financial advisors to Altice.

The transaction is to be financed with $6.7 billion of new and existing debt at Suddenlink, a $500 million vendor loan note from BC Partners and CPP Investment Board, and $1.2 billion of cash from Altice. Market sources suggest that given the size of the debt raise, loan and bond issuance on both sides of the Atlantic is a distinct possibility.

The transaction is expected to close in the fourth quarter of 2015 once applicable regulatory approvals have been obtained.

Altice S.A. (holdco) bonds are underperforming on the news while Altice International bonds are largely stable. The 7.25% and 6.25% euro-denominated notes due 2022 and 2025 are both down a point, at 104.25 and 99.75, respectively, while the 7.7% dollar-denominated notes due 2022 are indicated down 75 bps, at 102.25.

This will be Altice’s third jumbo takeover in just over a year. Earlier this year it completed a roughly €6 billion cross-border loan-and-bond financing backing the purchase of the Portuguese assets of Portugal Telecom from Oi for a €7.4 billion enterprise value.

In April last year Numericable and Altice completed a $16.67 billion, seven-tranche, euro and U.S. dollar offering that shattered records to become the largest bond deal on record, along with $5.2 billion in Numericable loans. The offerings were part of a multi-pronged M&A-related recapitalization under which Numericable purchased telecom firm SFR from Vivendi.

Suddenlink is the 7th largest U.S. cable operator with 1.5 million residential and 90,000 business customers, primarily focused in Texas, West Virginia, Louisiana, Arkansas and Arizona. In 2014, Suddenlink generated revenue of $2.3 billion and EBITDA of more than $900 million. – Luke Millar


April European Leveraged Loan Issuance Slips To €3.5B As Buyouts Fall Silent


European new-issue loan volume fell to €3.5 billion in April from €9.1 billion in March, staying on the same up-and-down pattern seen so far in 2015. The trend also looked similar by number of deals – only 12 transactions launched in April, down from the intra-year high of 21 in the prior month.

For the first time since December 2012, none of the new loans launching in April funded a buyout. The sole buyout tracked by LCD in April was financed via the high-yield bond market, namely €400 million of senior secured notes backing the buyout of Senvion by Centerbridge.

In the institutional market, the mismatch between supply and demand persisted as issuance declined to just €2.5 billion in April, less than half the €6.1 billion tracked in the prior month. Meanwhile inflows from repayments ballooned to nearly €9 billion in the month to April 24, as tracked by the S&P European Leveraged Loan Index (ELLI), pushing the Index to the lowest level since 2006 $$.

This chart is taken from a longer piece of analyis, available to LCD News subscribers here, that also details

  • European cov-lite volume
  • European sponsored loan volume
  • Leverage on European loans
  • European borrower source of funding