LBO loans up on last year

LOANS issued for leveraged buyouts (LBOs) reached a global volume of $89.3bn (£57.4bn) in 2010, indicating the first annual increase since before the downturn.

The rise in volume could indicate the return of debt-financed buyouts of firms by investors, as the volume reached nearly five times the amount recorded in 2009 of $18.2bn – the first time a year-on-year increase has been recorded since 2007.

The increase was boosted by deals in the US, where 64 per cent of volume was recorded, the highest proportion since 1996.

Deals included IMS Health’s $2.3bn facility and Fifth Third Processing Solutions’ $2.0bn LBO loan.

The most recent LBO loan recorded was a $600m facility to support the buyout of HealthCare Partners by Summit Partners.

Bank of America Merrill Lynch topped the global LBO loan bookrunner ranking last year, winning 12.2 per cent of the market. Barclays Capital had 10.1 per cent market share whilst Deutsche Bank had 7.7 per cent.

In Europe, two loans to support LBOs have been announced in January so far; the Blackstone led buyout of Mivisa Envases and the 3i Group buyout of Amor GmbH.