PE-owned Australian power producer targets US debt issue – report

According to Reuters, Alinta will issue a Term Loan B to help service a debt pile that comprises A$1.2 billion ($1.2 billion) in senior term loans, a A$400 million super senior loan and interest rate swaps of around A$210 million.

A TPG-led consortium that included Oaktree Capital Management took Alinta private in 2010 through a $2.1 billion debt-for-equity swap agreement.

Term Loan B issuance in the US is said to have reached $282 billion so far this year, up 57% year-on-year, as companies take advantage of strong liquidity. The terms available in the US are seen as favorable to those in Australia - the former is institution-led while the latter is bank-led - even accounting for the foreign exchange hedges.

Earlier this month, it was reported that movie theater operator Hoyts Group, which is owned by Pacific Equity Partners, was looking to raise $450 million in the US high-yield debt market. Apollo Global Management and Oaktree also tapped the Term Loan B market for $700 million to support the restructuring of Nine Entertainment after creditors took control of the company through a debt-for-equity swap.

Private equity investors talked up the potential of using the US for debt financing at the AVCJ Australia & New Zealand Forum in March.

"If you can access the US market that opens up more opportunities than we have seen in recent years because we can do larger financing and larger deals," said Justin Reizes, managing director at KKR Australia. "The pipeline is looking better than it has done for several years, with a number of corporate carve-outs coming. If you get similar leverage levels to the US it opens up public-to-private opportunities as well."

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• Topics
• Financing
• Buyouts
• Australasia
• North America
• Leveraged finance
• Australia
• TPG Capital
• USA
• buyout