Private Equity News & Analysis

Boots second lien syndication postponed indefinitely(3)

The underwriting banks syndicating the Alliance Boots debt package have pulled the second lien tranche of the debt package, just a week after they were forced to postpone syndication of the senior debt for the deal.

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Syndication of the £1 billion second lien tranche of the Alliance Boots debt package was pulled indefinitely today, according to a source close to the deal.

The lead underwriting banks, JP Morgan, Unicredit and Deutsche Bank have decided to postpone the syndication of the debt indefinitely, the source said. 

The second lien had been offered at a discount 96 percent of face value, with a yield of 425 basis points, but the uncertainty in the debt markets has apparently made it impossible for the banks to sell the debt. 

The banks have reportedly managed to syndicate the £750 million mezzanine tranche on the deal.

Despite the problems on Alliance Boots, the JP Morgan-led group of banks syndicating the $8 billion debt package for the financial arm of Chrysler managed to bring the debt to market at 95 percent, according to UK newspaper Financial Times. It was subsequently trading up as high as 98 cents on the secondary market.