Friday, December 9, 2022

Wall Road Caught With Extra Buyout Loans as Banks Fund Roper Spinoff

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(Bloomberg) — A gaggle of banks led by UBS Group AG has been compelled to fund a portion of the $2 billion of debt that they had agreed to offer for the buyout of a unit of Roper Applied sciences Inc., based on individuals with data of the matter.

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Personal fairness agency Clayton Dubilier & Rice, which bought a majority stake in Roper’s industrial operations enterprise, has agreed to purchase again a bit of the debt financing, partly relieving the burden for banks, mentioned the individuals, who requested to not be recognized as a result of the transaction is personal.

The deal is the most recent in a collection of leveraged financings that banks have been compelled to fund with their very own money as debt buyers pared again threat. Banks have been saddled with greater than $40 billion of such debt this yr, however have been in a position to trim their publicity in sure instances by offloading bonds and loans to institutional buyers at steep reductions.

Learn extra: Wall Road’s Hung Debt Swells to $43 Billion as Tenneco Closes

The group of lenders on the CD&R deal, which closed on Tuesday based on a submitting, additionally consists of Royal Financial institution of Canada, BNP Paribas SA, BMO Monetary Group, Mizuho Monetary Group Inc. and Natixis. The entire debt financing was about $2 billion, the submitting reveals.

Representatives for CD&R, UBS, BNP and Mizuho declined to remark. RBC, BMO and Natixis didn’t instantly reply to requests for remark.

–With help from Paula Seligson and Gillian Tan.

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