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Best High-yield Borrowers

       
Steven Rattner

Western Europe: Alfa Laval

When Stockholm-based private equity group Industri Kapital completed the e1.5 billion leveraged buyout of specialist engineering group Alfa Laval last June, it marked something of a breakthrough in Scandinavian corporate finance. It was the largest LBO ever completed in the region and the first to be partly financed in the high-yield bond market. However the complexity of the credit - Alfa Laval heats, cools, separates and transports products ranging from oil and chemicals to beverages and foodstuffs and pharmaceuticals - and the challenges of separating out a division from a larger public company, Tetra Laval, were time-consuming. By the time the issuer came to the European high-yield bond market in November, it found it in a near crisis, with most issuers effectively shut out and record spread widening in the secondary market.

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