European Levfin Wrap — Champagne Super-loans-ahead?

Karis Hustad

30 August 2024•3 min read

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

While news of a surprise Oasis reunion sparked excitement during an otherwise quiet last week of summer, the markets may soon be singing the tune of another iconic 90s rock band (wake me up, when September ends…).

The other kind of oasis. (Credit: Pexels)

While many were looking forward to a busy post-summer season, the sentiment is that next month may kick off to a slower start than some expected.

In our most recent European LevFin primary preview, primary activity is “not expected to start with a bang”, as one sellsider told us.

The reasons are mixed. Two big European LevFin conferences kick off the month and several crucial macro announcements are slated for mid-September. Some also see the mid-August equities wobble as creating a more hesitant environment. October is expected to be when deal flow picks up with greater consistency.

Still there’s some €16bn-equivalent of supply expected in September, according to one bank.

Long awaited LBO money is also headed to market, including £1.4bn for a package delivery business with financing spread across euro loans and sterling bonds, a €700m financing for a buyout of French food prep brands, as well as the refi of a European snack manufacturer.

We’ve also heard a few more private credit to BSL refinancings ahead, showing the trend isn’t over just yet.

Beyond those slated syndications, lenders are eager for financings of mega-deals in late stages, including DB Schenker, Deutsche Bahn’s logistics business (final bids are said to be in at around €14bn) and French healthcare firm Sanofi’s carveout of its consumer health division.

We’ve got a full breakdown of the upcoming pipeline, including names to watch and expected purpose, here.

AI yai yai

Elsewhere in the market, all eyes were on AI as Nvidia reported earnings this week. While revenue was up, it didn’t meet expectations, leading to a fall across tech stocks as the market assesses whether the AI boom can live up to its promises.

AI is also something we’re watching closely in the leveraged finance world. Earlier this year we did a deep dive into how this has impacted outsourcing firms such as KronosNet and Foundever (formerly Sitel), as customer service duties are increasingly done by AI tools such as chatbots.

This week we’ve got a look at Foundever’s Q2 private earnings, in which adjusted EBITDA is down and leverage deteriorated — but it hasn’t yet deterred lenders. See the full report here.