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This is our weekly newsletter on all the latest trends, breaking news, and deep-dive coverage in European leveraged finance. Sign up for the newsletter here.

With the year winding down, the primary market has entered a period of relative calm. While bankers anticipate a handful of remaining repricings and bond refinancings, they have largely been busy building up pipelines for the new year.

Are we finished with the year yet, or not quite? Credit: Photo by Ketut Subiyanto/Pexels

This week’s leading chatter is Spanish Pharmaceutical group Grifols’ privately placed €1.3bn SSNs due 2030 to term out its €343m outstanding SSNs due in February 2025 and repay the drawn RCF. The 7.125% coupon with no OID is slightly lower than the privately-placed €1.3bn 7.5% SSNs it issued earlier this year. S&P upgraded Grifols' credit rating to B+ (from 'B') following the transaction and Moody's is expected to reinstate its rating.

A special redemption provision in the debt placement has also caused the current SSNs to pop to around 104 on Friday morning. It allows redemption at 104% plus accrued interest within six months, but this right is restricted to Brookfield or a Brookfield-led group as potential buyer, according to Bloomberg.

As for potential pipelines, banks have prepared a €500m debt package to support the acquisition of airfield lighting and gate solutions provider ADB Safegate, as Carlyle looks to sell the company after seven years of investment.

JP Morgan also hosted non-deal roadshows for Spain-based customer experience firm KronosNet around the time of its Q3 24 results, feeling out investor sentiment for a potential deal to term out the company’s RCF drawings.

And certain lenders to KronosNet’s also embattled peer, US-based Foundever, are considering a co-op agreement with US advisor Gibson Dunn, three investors told 9fin — and all said they were ready to sign up. Foundever and Gibson Dunn did not respond to requests for comment.

However, banks look likely to lose out to direct lenders in the carve out of Kantar Media, a division of market research firm Kantar Group, as HIG emerged as the leading candidate to acquire the business with a view to financing this in the private credit markets.

We also explored the potential comeback of cash-pay subordinated debt, but bankers appear divided on the issue. The central question seems to be whether base rates and credit spreads have narrowed sufficiently to create space for junior debt within the capital structure.

If you want to gain insights from an industry veteran, check out our interview with Deborah Cohen Malka, portfolio manager at AlbaCore Capital Group. We discuss tight market conditions, plus optimism for a an uptick in M&A.

While you wait for 9fin’s bonds and loans year-end wrap filled with data and charts, watch for a little fun coming your way next week.

The loan market is slowly settling into Christmas, with just one European issuer, Organon, launching this week — but in dollars — and Canadian Knowlton Development Corporation offering up a slim slice of euros alongside a mostly dollar deal.

Netherlands-based health food firm Ecotone is also looking to extend its 2026 debt by three years in exchange for a €70m paydown from its recent asset sale, but the deal remains in pre-marketing, with lenders wall-crossed on the name unsure about when it could hit general syndication as Christmas creeps near.

Here’s a look at what’s currently in market:

Instead, lenders are kept buying with earnings. Nordic Capital’s nursing home operator Alloheim is on the mend as Q3 24 net leverage reduces to 5.7x.

“There hasn’t been massive outperformance,” said a buyside source. “But it’s definitely holding up better than expected versus six months ago.”

Meanwhile, Advent’s German specialty chemicals company Röhm reported Q3 24 EBITDA growth just over 50% YoY, linked to high capex costs abating as its new LiMA facility gets off the ground.

“For the company to delever into a sustainable capital structure they will need to see a recovery, but it should have decent liquidity to bridge into 2026,” said a second buysider.

Weakness in the automotive sector took a turn for the worse in Q3 24, with auto suppliers reporting an average year-over-year decline of 6.7% in revenue and 15.5% in EBITDA, according to 9fin data, read the full analysis here.

Elsewhere, Kloeckner Pentaplast — which is said to be in its own drawn-out pre-marketing — has had its refinancing efforts and Q3 24 earnings impacted by an unexpected de-stocking in its pharma segment.

CFO Marc Rotella conceded during the earnings call on Thursday (12 December) that the de-stocking had “somewhat delayed” the ongoing refinancing efforts (transcript and playback available here). Similarly, 2024 EBITDA guidance was downgraded by €10m-€25m to €300m-€315m on the back of the softer demand outlook in pharma. Read the in-depth review here.

We also kicked off a new series where we dive into high-yield telecom operators from around the world. We’ll be looking at how they perform, what gives them a competitive edge, and the unique factors influencing the industry. In our first edition, we’re zooming in on Italy, focusing on Iliad and Telecom Italia.

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