IPEM 2022, Daily Spin 1/3 – September, 20th
IPEM 2022 Events now released! Enjoying Cannes and the Mediterranean while you network
Citrix debt fix
A syndicate of banks who helped finance the Citrix Systems buyout to the tune of $15 billion have seen an oversubscription of interest among investors.The syndicate discounted the debt to around 92 cents on the dollar in response to rising interest rates. In response, investors have swarmed like bees to honey. It is not yet known whether the discount will be adjusted, or whether the syndicate will look to offload more of the debt than originally planned. Either way, it is a sign that investors still want the sugar rush of a sweet deal in leveraged finance.
Feeling chipper!
Brookfield Asset Management has put its chips on the table and agreed to jointly finance Intel Corporation’s semiconductor factories in Arizona to the tune of circa $30 billion. It is a sign of US chipmakers’ intent to onshore chip production in a bid to overcome global supply chain issues and follows President Biden’s introduction of the CHIPS and Science Act, providing subsidies to domestic chipmakers. The financing cost is believed to be in the 4.4% to 8.5% range. It goes to show that when the chips are down, US corporations are willing to explore new initiatives. Watch this space for further joint financing arrangements between corporate America and private capital.
Going…going…not gone public!
Private companies are feeling the burn. According to Dealogic, IPO volumes are the lowest they’ve been since 2009, totaling $5.1 billion year-to-date and causing company CEOs to apply Factor 50 sun protection inside the office – as well as on their summer holidays – as they look to ride out the market volatility. The extent of the IPO freeze – to continue the seasonal reference – puts 2022 at risk of being one of the worst ever years for exchange listings. Many will be hoping that inflation calms down and the markets regain a spring in their step; otherwise it could be a winter of discontent.
Private equity finds its Seoul
South Korea is fast becoming the life and soul of Asia’s private equity industry.Deals rose 100% in 2021 to nearly $30 billion and its buyout market has assumed “disproportionate importance” according to Goldman Sachs. Like any good party, the right ingredients need to be in place. Rather than good music and a finely stocked bar, South Korea boasts a strong financing environment, a slew of global conglomerates and plenty of family-founded businesses that must be music to GPs’ ears. Korean private equity groups are coming of age. The stage is set for them to take on their global peers and showcase the country’s VIP credentials.