LONDON May 3 Bankers have lined up to
US$2.5bn-equivalent of debt financing to back the acquisition of
publicly-listed Hong Kong-based international schools operator
Nord Anglia Education, banking sources said on
Global coordinators Deutsche Bank and HSBC, alongside
bookrunners Credit Suisse and Macquarie, have underwritten a
debt financing, which will be in the form of leveraged loans,
denominated in dollars and euros.
Some US$2.5bn of debt equates to around 7.5 times Nord
Anglia’s Ebitda, the sources added.
The financing is set to be syndicated to institutional
investors in the US and Europe, the sources said.
CPPIB, Baring Private Equity Asia and Nord Anglia were not
immediately available to comment.
A number of US bankers said they were unable to commit to
the deal as leverage exceeds the 6.0 times debt-to-earnings
ratio cap imposed on regulated banks that fall under the remit
of the US Leveraged Lending Guidelines.
The investigative arm of Congress has been asked to review
the guidelines on US lending, released in 2013, that critics say
have put a crimp in bank loans to businesses. US Senator Pat
Toomey asked the US Government Accountability Office to
determine the formal status of the guidelines, which have never
been approved by Congress.
“High leverage excludes US banks from these deals. It is
very binary and there isn’t much leeway,” one of the sources
The deal is likely to be welcomed by banks and investors
alike, frustrated by a surge of repricings and refinancings this
year as sponsors take advantage of the excess levels of cash
available to push for tighter pricing on portfolio credits, amid
a lack of new money deals.
Nord Anglia said it would be taken private by Canada Pension
Plan Investment Board (CPPIB) and Baring Private Equity Asia on
April 25, in a deal that values the company at US$4.3bn,
Baring has a 67% stake in Nord Anglia, which operates 43
schools in 15 countries.
The deal includes a so-called go-shop period, during which
Nord Anglia can evaluate proposals from other buyers for 30
(Editing by Christopher Mangham)