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Trlpc raft of european leveraged loans priced to attract investors

Dec 8 Europe's leveraged loan market has seen a flurry of deals launch for syndication in a pre-Christmas rush that offers investors real pricing differentiation, with assets priced to sell depending on credit quality, banking sources said. Around ten deals are in syndication, as bankers seek to tie up event-driven and opportunistic financings in the run-up to year-end in order to avoid carrying risk into the next year."The first week of December is the last time really to launch a deal if it is to get done before Christmas," a senior leveraged loan banker said. The deals were launched with very different pricing, in an unusual move for Europe's leveraged market, which has traditionally adopted a wholesale pricing model depending on demand and supply technicals and macroeconomic conditions. The pricing differentiation is different to what the loan market experienced over the summer, when credits launched with similar terms but priced differently at closing, flexing up or down depending on how they were received in syndication."The market is getting a bit more mature and there is an increased realisation that not all risk should be priced the same," a second loan banker said. Banks have been more vigilant to price risk in the run-up to year-end after some deals struggled in syndication post summer, including British outdoor clothing chain Fat Face and Belgian aluminium systems manufacturer Corialis. Arrangers have considered a number of variables when pricing the most current deals in the market, including credit quality, currency, sector, country and rating.

Pricing differentiation, which is an acknowledgement of risk from sponsors and arranging banks, could tempt some investors to commit to more hairy credits if they are being fairly compensated, rather than just cherry-picking the best deals."Pricing differentiation is a good thing rather than a one-size-fits-all approach. Sponsors have to build in more realistic assumptions on where they can get deals cleared," a loan investor said. QUICK SELL

Based on margins, OIDs and Libor/Euribor floors (or three-month Euribor/Libor when no floor exists), telecoms masts group TDF's 150 million euro ($184.14 million) term loan on its German subsidiary Media Broadcast is priced the highest in the market at 700bp. The deal, which refinances debt and facilitates a sale of its French unit, has been priced generously to sell quickly with a 550bp margin, 98 OID and one percent floor. A 150 million euro add-on facility for diversified consumer products company Spectrum Brands is the tightest with an all-in price of 387.5bp that comprises a 300bp margin, 75bp floor and 99.5 OID."Spectrum is a Double B credit and is a massive multi-billion dollar company so people are more confident it is robust and not going away, which is why it is priced tightly," a third loan banker said. UK restaurant chain Prezzo's sterling term loan is priced at 680bp, paying up for sterling and the sector, which is exposed to discretionary consumer spending. Southern European car rental company Goldcar has an all-in price of 575bp, but may need to price even wider as it is Spanish and a cyclical business.

The pricing on a 745 million euro covenant-lite term loan denominated in euros and dollars that backs EQT's buyout of Siemens Audiology Solutions is 587.5bp. Pricing has been pushed wider on the euro portion for a credit of this quality because the US market has widened."Pricing in the US has changed a lot and gone wider - this has dragged out pricing on Siemens, which is overly generous on the euro portion and should now be a blowout," a fourth loan banker said. A 760 million pound-equivalent ($1.19 billion) dual-currency term loan backing Turkey's largest food group Yildiz Holding's acquisition of UK-based snacks maker United Biscuits is priced at 483bp on the euro piece and 580bp on the sterling portion, to target CLO investors. A dual-currency dividend recapitalisation for UK second-hand vehicles seller British Car Auctions is priced wider than United Biscuits at 495.5bp on the euros and 592.5bp on the sterling, as owner Clayton Dubilier & Rice pays up slightly for doing an opportunistic deal."Some deals have priced a lot wider because of the credit quality perception, such as TDF. Some deals have priced tightly as they play to the European CLO market, such as United Biscuits. Some deals arrangers have needed to make attractive compared with other deals in the market, such as Goldcar," the third loan banker said. Depending on the outcome of these deals, pricing differentiation may continue into next year when a new batch of deals in the pipeline launches for syndication including Swiss packaging group SIG Combibloc, online gaming firm Sky Bet, Dutch software company Exact and telecoms business Portugal Telecom."There is not enough direction and confidence in the market. January's pricing depends on the results of these deals in the market. If they clear strongly there will be pressure to price aggressively. If they wobble, pricing will be wider in January," the third banker said. ($1 = 0.8146 euros) ($1 = 0.6399 pounds)

Your money what your credit card covers for car rentals

(The author is a Reuters contributor. The opinions expressed are his own.)By Mitch LipkaJuly 6 In the midst of moving from Atlanta to St. Louis last year, Thomas Nitzsche discovered his parked rental car had been hit by another car, causing $791 in damage. To keep costs low, he had rejected the "collision damage waiver" (CDW) insurance offered by the rental car company, which can run as much as $45 a day and can include a deductible. Nitzsche, who works for ClearPoint Credit Counseling Solutions, says it was big relief to learn the damage was covered by his credit card."That was a pretty big chunk of change," he said. It took three months or so for the payment to be made from Visa to Hertz, mostly because of requests for more information or the filing of paperwork. In the end, though, the accident cost him nothing out of pocket. While consumers typically have coverage from their credit cards for accidents, they often do not benefit from the full coverage Nitzsche got. Many people have auto insurance on their regular cars, which acts as the primary insurer in the case of loss or damage. The credit card insurance provided full coverage for Nitzsche because, at the time, he did not own a car. KNOW YOUR COVERAGE Not every card affords the same coverage. Most Visa cards will cover theft, damage to the rental car, towing and loss-of-use charges if you do not have a personal auto insurance policy.

However, both Visa and Mastercard exclude injury, property damage and damage to other vehicles, according to website If you have your own insurance, Visa will reimburse your deductible as well as some other charges your insurer does not cover. Mastercard's insurance coverage varies by the issuing bank. A USAA World MasterCard, for example, provides largely the same benefits as Visa, but caps loss of use reimbursement at $500. A few credit cards automatically offer primary coverage, meaning you are covered even if you have your own car insurance. They include Discover Escape, Chase Sapphire Preferred and United Mileage Plus Explorer. That could be helpful if you do not want to risk a premium increase on your own car insurance. A study early this year by found that a single claim of $2,000 on average boosts rates by 41 percent.

American Express card holders are afforded the opportunity to a pay a one-time fee per rental of $16 to $25 to change their coverage from secondary to primary. You can enroll online or by calling the company. Most credit card companies require you to refuse the collision damage waiver insurance offered at the car rental counter or it negates the card's coverage, says Robert Harrow, research analyst for credit card and insurance analysis site That can sometimes be difficult with an insistent clerk. Eva Glasrud, who runs a travel blog (, says she repeatedly tried to reject rental car insurance on a trip to Mexico last November. Eventually, the San Francisco resident gave in and took the $20-a-day additional insurance."I thought maybe we could get part of it back if I complained when we got home," she says. "But we never heard anything back.

EXCLUSIONS The fine print can be lengthy. Among the limitations:* Typically, only physical damage to the rental vehicle due to a collision or theft is covered, but injuries to you or others are not, Harrow says. Those would be covered by your auto insurance policy; if you do not have one, you should take the rental company's additional personal injury coverage. You can also buy a non-owner liability policy from many auto insurance companies.* Loss of personal items is typically excluded.* When traveling overseas, credit cards will not cover you in certain countries, including Australia, Ireland, Israel, Italy, Jamaica, and New Zealand, Harrow says.* While it might seem obvious, the card you use to pay has to be used for the entire rental and the bill needs to be in the name of the cardholder, notes Rachel Drake, insurance expert for the insurance shopping site COLLECTING CLAIMS Collecting payment from a card company can take a while, as Nitzsche found out. Some pay directly to the rental car company while others will reimburse cardholders. New York media executive Andrea Garcia is still dealing with several hundred dollars in damage to her rental car when it was broken into during a vacation to Miami in May. She says it took some work to file a detailed claim form, provide photographs and jump through other bureaucratic hoops. Unlike Nitzsche, she had to lay out cash and is still waiting to be reimbursed.