Article/Intelligence
CVC Taps Banks, Direct Lenders to Raise About €6B Financing to Back DB Schenker Bid Due Aug. 22; Lenders Scrutinize Guarantee, Performance Lines
Reporting: Maryna Irkliyenko, Nick Krause CVC is in the process of raising roughly €6 billion of financing to back its offer for Deutsche Bahn’s logistics subsidiary DB Schenker due on Aug. 22, sources told Reorg. The private equity firm, which recently sent out a financing grid to a wide group of banks and direct lenders, is lining up circa €4.5 billion of funded debt, split across term loan Bs and high-yield bonds, through an all-senior structure. It is also looking to raise about a €1.5 billion PIK to help bridge the gap between equity and debt, the sources said. In addition, the sponsor has to arrange around €1.6 billion of undrawn debt, comprising around €1 billion of guarantee and performance lines, given the carveout nature of the deal, and roughly €600 million of RCF. The sponsor is also looking to arrange around a €500 million factoring line and varying amounts of reverse factoring. The grid also requests commitments for an asset-backed loan, or ABL, the sources said. However, the large guarantee and performance lines are more complex to arrange because they have to be underwritten by the lending banks and later syndicated to commercial banks and insurance companies,[...]