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APAC (ex-Japan) PE-linked-M&A loan volumes look set to surpass 2021

The volume of Asia Pacific (ex-Japan) club and syndicated loans to support acquisitions linked to private-equity firms appears set to surpass last year’s record levels, going by the size of deals completed and in the pipeline so far this year.

For the first four months of this year, USD 8.33bn-equivalent such loans from 18 deals were completed in the region, while at least USD 10.56bn across 13 deals have been launched or mandated. Combined, they represent 92.5% of the USD 20.42bn such loans closed for the whole of last year.

The 4M22 volume is a new first-four-months high since at least 2014 and is up 50.1% from the USD 5.55bn raised via nine deals in the same period last year.

Of the deals in the pipeline, 61.5% by value are for acquisitions of Australian companies. The country accounted for 51% of the total PE-linked-acquisition loan volumes in the region in 4M22 with USD 4.25bn across nine deals completed.

Blackstone Group and Starwood Capital Group have teamed up for an up to AUD 5.9bn (USD 4.1bn) loan to part-fund their proposed AUD 8.87bn acquisition of casino operator Crown Resorts, according to a scheme booklet filed with the Australian Securities and Investments Commission (ASIC).

A consortium comprising Morrison & Co, Commonwealth Superannuation Corp and Brookfield Australia (a unit of Brookfield Asset Management) is seeking an around AUD 2bn (USD 1.39bn) five-year loan to back its proposed AUD 3.62bn acquisition of ASX-listed telecommunications-services provider Uniti Group.

A USD 957m five-year loan for Blackstone’s proposed buyout of Singapore-based technology-services provider Interplex Holdings has been provisionally allocated. Syndication agreement is expected to be signed by the end of this month.

Other PE firms such as CVC Capital Partners and Baring Private Equity Asia (BPEA) have also been active in the region. A USD 330m five-year loan to part-fund CVC’s purchase of an 89% stake in India-based chemicals manufacturer Sajjan India was allocated in April but syndication agreement has not yet been signed. Before that, the syndication of a USD 350m tranche of a USD 700m loan to support the take-private of Razer Inc by the Hong Kong-listed gaming-hardware maker’s top executives led by co-founders and CVC was completed in April.

A consortium of BPEA and Ginko International’s existing shareholders is currently in the market for a USD 640m-equivalent five-year loan for its proposed privatization of Taiwan-listed contact-lenses marker. In February, a USD 760m seven-year term loan B (TLB), part of a USD 1.15bn loan to support BPEA’s proposed buyout of Hong Kong-based business-services provider Tricor Group, was priced.

The Carlyle Group is in the process of signing a USD 605m loan which includes a USD 415m seven-year TLB backing its proposed acquisition of China-based packaging company HCP Holdings. The deal, if completed, will be the first-ever TLB for a leveraged buyout of a Chinese company.