Barclays Share Discussion Threads

[bernie37] 11/2/2020 20:40

Bloomberg) -- Barclays Plc had the deal seemingly locked up.

Along with a trio of smaller lenders, the bank had agreed to arrange a $1.1 billion loan for ACProducts’ buyout of a unit of rival Masco Corp. While the terms of the financing weren’t quite as good as the kitchen-cabinet maker’s private equity owners had hoped, getting a signed commitment from the banks allowed the company to finally announce the deal in mid-November.

Then a couple of months later, something odd happened: a new -- and markedly better -- funding proposal landed in front of the buyout firm’s executives. The terms were so much better, in fact, that they would wind up coming out ahead even though walking away from the Barclays deal would trigger millions of dollars in breakup fees, according to people with knowledge of the matter. They said yes.

The last-minute lender wasn’t Bank of America Corp. or JPMorgan Chase & Co. or any of Barclays’ other traditional rivals. It was KKR & Co., a giant in the world of private equity that is normally on the receiving, not giving, end of deals in the $1.2 trillion U.S. leveraged loan market. And the decision to undercut Barclays on the ACProducts loan underscores just how cutthroat KKR and other private-equity firms have become in recent years as they look to play a bigger role in the lending market.

Representatives from Barclays, KKR and American Industrial Partners, which owns ACProducts, declined to comment on the transactions.

Breakage Fee

For KKR, its credit-investing and debt underwriting business has increasingly put it in competition with established Wall Street players, especially in the business of offering buyout financing. Private capital providers are rushing to build out direct lending operations, looking to capitalize on a shift in global finance many say is just getting started.

KKR’s ACProducts deal was especially surprising to market watchers because Barclays already had an established relationship with the company and its sponsor.

The bank had lined up about $400 million of financing for a separate acquisition the Texas-based company made about a year ago. While Barclays was forced to take about half of that debt on its balance sheet as syndicated loan buyers balked, the bank had been willing to lend to the company when others wouldn’t. Its M&A advisers also worked with ACProducts on the Masco acquisition.

In the end, Barclays didn’t walk away empty handed. In fact, thanks to the so-called alternative-transaction fee, the bank is still getting around half of the money it would have otherwise collected for underwriting the deal -- without having to go out and sell it to investors, one of the people said, asking not to be identified because the details are confidential.

The loan arranged by KKR will also repay ACProducts’ existing debt, getting Barclays out of the portion of the original financing it was never able to offload.

The KKR package had several advantages over the Barclays-led deal. For starters, it would eliminate the need for a bond, which would have burdened the company with additional disclosures and been more expensive to repay in the event American Industrial Partners wanted to sell the company.

It also offered a lower cost of capital compared to the rates at which the banks had agreed to backstop the deal, and didn’t come with the additional investor protections that direct lenders often require, the people said.

KKR’s credit division and some co-investors have also agreed to take around three-quarters of the loan themselves, leaving only a small portion of the financing exposed to the ebb and flow of the syndicated market, one of the people said.

The unitranche loan maturing in 2025 may pay 6.5 percentage points over the London interbank offered rate and sell at an original issue discount of 99 to 99.5 cents on the dollar. Investors have until Feb. 18 to participate in the offering.

[johnwise] 11/2/2020 20:14

Parts of China are down to 10+ days food.

50 million people are quarantined.

The Truth About the Coronavirus

Chinese Economy

VIDEO

[johnwise] 11/2/2020 19:12

Barclays Full-Year Results: Preview

Expectations:
Pre-tax profit +5.2% £6 billion vs £5.7 billion (same period last year)

[bernie37] 11/2/2020 18:50

KKR direct lending undercuts Wall Street loans - Bloomberg

Feb. 11, 2020 1:22 PM ET|About: KKR & Co. Inc. (KKR)|By: Liz Kiesche, SA News Editor
Private-equity stalwart, KKR (KKR +1.1%), usually on the receiving end of loans from Wall Street banks, is now competing with them in providing loans.

The company broke up an agreement reached in November for Barclays (BCS +1.3%) to arrange $1.1B in financing for ACProducts to buy out a unit of rival Masco Corp., Bloomberg reports.

A couple months after Barclays agreed to provide financing, KKR stepped in with significantly better terms. So much so that the borrowers would still come out ahead even after paying millions of dollars of breakup fees from pulling out of the original loan, Bloomberg report, citing people familiar with the matter.

Advantages of the KKR deal included eliminating the need for a bond, which would have required additional disclosures by the borrower; lower cost of capital;and with KKR and co-investors agreeing to take about three-quarters of the loan themselves, only a small portion of debt would be explosed to the whims of the syndicated market

[klotzak] 11/2/2020 18:25

Potty normally releases the results a few days before they are due. He's close to the CEO and the Dik.Genuinely think this share will go through 190 in the next 9 days, before XD.

[johnwise] 11/2/2020 17:28

VIDEO

President Trump is saving America from socialism

FULL RALLY: President Trump in Manchester, New Hampshire

[jordaggy] 11/2/2020 14:54

The market seems to think they will come in better than forecast.

[portside1] 11/2/2020 14:51

Diku or better , off to the pub now till 10 pm

[diku] 11/2/2020 14:46

Hope 192p can be breached...

porty...think 210p next target...

[portside1] 11/2/2020 13:41

Bernie what's your view for Thursday

[portside1] 11/2/2020 13:16

Manics , the difference is those people worked and paid taxesThere was no benefits as such no family allowance as such Most families went to jumble sales in there towns now you never hear of jumble sales , and the reason is simple to answerThese 20/40 want every thing new ,Ever one I new worked

[manics] 11/2/2020 10:24

God damn the Boomers. The most toxic generation ever.




(Raoul Pal) explains in detail how the baby boomer generation, through the rational and reasonable behavior of seeking to live and retire comfortably, has fueled the creation of a massive financial bubble that touches nearly every corner of the economy as pensions take more and more risk. Pal breaks down the crucial demographic, economic, and political trends that have combined to create the problem and suggests potential solutions for Baby Boomers, Millennials, and Gen Xers to get out door before the fire of the coming recession. Filmed on February 4, 2020 in Grand Cayman. See Raoul's first Retirement Crisis video, which was watched by over 2 million people, here:

[johnwise] 11/2/2020 09:52

portside1

Consecutive Tory governments continue to import vast numbers

Importing third world culture into Europe
Video

[portside1] 11/2/2020 09:16

Job wise. Our is boris going to pay all the benefits for immigrants migrants 90% pay nothing in to the system fact 90% claim some sort of benefits

[johnwise] 11/2/2020 09:04

Boris needs the money for his £20billion bridge

[johnwise] 11/2/2020 09:02

Don't raid the pension funds Boris. We are and have been working hard to have a few years of peace and fun before we meet our maker. Gordon Brown did this twice don't do it again or there will be nothing left


Reports that Boris Johnson and his Chancellor Sajid Javid are considering a ‘mansion tax’ on higher priced homes as well as a further raid on the tax relief on pensions savings are shocking, writes ALEX BRUMMER

[johnwise] 11/2/2020 08:58

How's that Labour party doing these days? Still licking the wounds after a thrashing? Never mind, there's always the cllimate change agenda (another lost cause for you to cling to)

VIDEO: IS GLOBAL WARMING A SCAM?

[portside1] 11/2/2020 08:13

To transport wood pellets for thousands of miles then the loading of them the unloading of them at ports then transferring them to stations .And yes they started using pellets 23 years ago fact I was there Back to barcs going up looks good news ahead we hope

[bookbroker] 11/2/2020 05:32

Nothing to do with the use of wood pellets and how they are dried, it is whether it is carbon neutral as a result of replanting the axed trees! Just a case of how you interpret it, anything this Barc’s thread, not Drax!

[ddroz] 11/2/2020 02:52

Potty, you didn't work in power stations, and wood pellets were not in use 22 years ago when you 'retired' at 50, with 900k invested and took your 30k net pension.Folks if you feed this fantasist you are quite probably helping him on his way to the funny farm. He's telling another thread that he's on the board at Spoons, I. Ow see I think he he's got problems!Mafia, football, Cyprus, Barclays..... the link? Mental health.

[portside1] 10/2/2020 20:36

A new story the mafia are now buying football results in Asia and now in Cyprus Italy Spain Germany The bookies are now in trouble . Results are fixed the punters are on a loser .It's now not fit to back any world football games You have now been warned it's all fixed