GE European Leveraged Finance, part of GE Commercial Finance, has reached agreement on a deal to acquire around E700m worth of leveraged loans from Abbey National Treasury Services [ANTS]. The transaction more than doubles the size of the unit’s leveraged loan portfolio.
The investment, which is the single largest transaction made to date by GE’s leveraged finance team, comprises 34 senior and mezzanine leveraged business loans spread throughout Europe. The price paid for the portfolio has not been disclosed, although reports put the price at ‘close to par’.
The loans formed part of Abbey's acquisition finance portfolio, which had assets in excess of £2bn in 2002. Abbey is looking to reduce its activity in the wholesale banking sector and is thought to be considering a complete withdrawal. Last year, the bank announced that it was winding down its private equity investment unit also.
GE’s European Leveraged Finance team, headed by Graham Randell, was set up in June 2000, and has made a series of hires over the past two years. GE already has a strong franchise in the leveraged loan market in the US, having made a point ofcontinuing to supply loan finance product even when many other banks were retrenching.
The unit now wants to establish itself as a long-term player in the European leveraged finance market. “As a team, we have a considerable amount of expertise in the European leverage finance market and see this acquisition as adding a portfolio of good quality loans to complement our strategy of organic growth,” commented Rendell.
In the past three years, the group says it has trebled in size and plans to continue its growth in the senior and mezzanine debt middle market. “We will continue to develop our business of supporting the private equity community and the investment banks and expect to see improved market deal volumes this year, which will enable us to increase our offering of this sector,” Randell added.