corrected-sealed air us$475m loan challenges bank appetite
Correct the title to clarify the new loan)
Michelle Serra, New York, June 25 (LPC)-
Packaging company Sealed Air is packing a $475 Term Loan a (TLA)
This poses a challenge to the bank\'s return model and limits their demand for assisted assets.
In order to attract the needs of banks eager to generate additional income and improve profitability, the Sealed Air with the ba2/BB rating played a role, funded fixed-term loans were obtained at a lower cost than the existing revolving credit facility.
Typically, term loan debt is as expensive as a revolving line of credit, unlike real estate or assets
The price may be different in the loan market.
\"They want to price this price above core revolving credit, mainly to bet on some of the bills that banks are very eager to get financial support,\" said one banker after the deal . \".
\"They buy assets at very aggressive prices.
\"Sealed Air financing supporting the company\'s $510 cash acquisition of automated packaging systems for bagging system manufacturers was carried out following an increase in TLAs demand in 2019, part of the banking market, with historically fluctuating interest levels for banks. Year-to-
TLA transactions account for 25% of leveraged non-leveraged transactions
Institutional Distribution (
Cycle credits and TLAs)
Data Display, LPC, Refinitiv units.
TLA transactions accounted for 23% of leveraged non-leveraged products in the first half of 2018
The move also challenged a bank\'s return model, which historically offered a spread premium for double profits.
B. Loans with relatively low risk.
The company offered a new TLA of $475 for 112.
More than 5bp on Libor-
Within the pricing and expiration period of the existing 1bn USD revolving credit and its $223 term loan.
The current pricing of revolving credit and existing term loans is 15bp higher than the London interbank lending rate.
There are five loans in both.
The year expires and expires on 2023.
\"This is a challenge for the bank\'s appetite for capital loans,\" said the second banker . \"
B. The rating company just landed at the bank\'s sweet spot, which proves how much the bank\'s attitude towards funded assets has changed with the increase in financing costs and the depletion of loan supply.
As the banking business is still under pressure in terms of profitability, and the way revenues and revenues are generated is under greater pressure, it is unlikely that banks will reject new loan opportunities.
\"This is radical,\" said the third banker . \"
\"In general, the lack of mergers and acquisitions
B. The site and the lack of proportional transactions.
Banks are in desperate need of attractive fixed-term loans.
That\'s why it becomes easier.
\"It would be great if you wanted to buy it, they would say.
\"If you don\'t, we\'ll find someone else,\" said the first banker . \".
The first and third bankers said Bank of America Merrill Lynch was leading deals that had been circled but not yet allocated.
BAML and Capital One are 12-
After about 15 relationships, they said, member banking groups declined.
A representative of sealed airlines and BAML did not call back on time.
Historically, the banking market has been a source of cheap financing in exchange for future business derived from lending relationships.
Because some bank loans when deciding to commit capital to the loan relationship, the difference between the cost of borrowing in the open market and the interest rate of the loan is crucial.
Banks with large dollar deposits are less likely to need loans to fund new loans and are eager to get paid for capital-backed assets.
The banks include regional banks such as Bank of America, SunTrust and citizens.
Other lenders that have recently shown interest in regular loans include Bank of Canada TD Bank and Scotiabank, as well as banks in Japan and some India.
The appetite of European banks varies depending on their capital costs, and given that the price of their credit default swaps proves the perceived risk of lending to European institutions, this risk has been high until recently (CDS).
\"A little panic last year.
The Deutsche Bank effect hurt everyone.
\"It has calmed down,\" said the first banker . \".
He refers to Deutsche Bank\'s credit shock in 2018, when it was the Federal Deposit Insurance company responsible for promoting trust in U. S. financial institutions, the German bank was listed on the list of \"problem banks.
The cost of insuring Deutsche Bank\'s debt doubled in a year to five timesyear CDS.
Recently, the price of bank CDS has dropped, and the financing costs of many banks have also dropped, which has reduced the cost of committing to investing in assets --
\"There are fewer people who don\'t like it now,\" said the second banker . \"
\"Although each bank is different every month. ” (
Michelle Sierra, edited by Jack Doran and Leela Parker Deo, reports)