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Leveraged loans: The ones that didn’t get away

As Euromoney went to press towards the end of July, a number of high-profile leveraged loans had been pulled, restructured or had their status thrown into doubt. They included:

 Crunch time for LBOs

Thomson Learning

The deal was to back the $7.75 billion buyout of academic and humanities information provider Thomson Learning by Apax Partners and pension group Omers. The original structure involved a leverage multiple of 9.8 times through to the PIK loan and had to be restructured in June. It was scaled down from $2.14 billion to $1.6 billion, with the underwriters eventually having to take down the $540 million bridge loan instead of issuing a $540 million senior unsecured holdco PIK FRN. The $1.2 billion term loan B was flexed up from 250 basis points over to 275bp over. The deal was underwritten by JPMorgan, Citi, UBS and RBS.

US Foodservice

This involved a $3.3 billion facility to fund the buyout of catering distribution company US Foodservice by Clayton Dubilier & Rice and Kravis Kohlberg Roberts. Underwriters had to shelve both a $1.55 billion bond and $3.445 billion loan package after the Thomson Learning transaction ran into trouble.

The deal, which pushed the leverage multiple above nine, had originally included a $1 billion eight-year PIK toggle but was restructured to a more conservative senior/subordinated structure, with the sub piece reduced in size to $550 million.

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