| Steven Rattner | ||||||
Western Europe: Alfa Laval
When Stockholm-based private equity group Industri Kapital completed the e1.5 billion leveraged buyout of specialist engineering group Alfa Laval last June, it marked something of a breakthrough in Scandinavian corporate finance. It was the largest LBO ever completed in the region and the first to be partly financed in the high-yield bond market. However the complexity of the credit - Alfa Laval heats, cools, separates and transports products ranging from oil and chemicals to beverages and foodstuffs and pharmaceuticals - and the challenges of separating out a division from a larger public company, Tetra Laval, were time-consuming. By the time the issuer came to the European high-yield bond market in November, it found it in a near crisis, with most issuers effectively shut out and record spread widening in the secondary market.
Yet the lead managers, UBS Warburg and CSFB, executing its first major deal following the acquisition of DLJ, were eventually able to complete an e220 million for the single-B rated company, even as other deals were being pulled and high-yield bond indices were falling in line with Nasdaq.