Discounts Flip to Premiums for Europe’s Frothy Leveraged Loans
The offices of CitiGroup Inc. in Dublin. The loan to Infra Group is being put forward by Citigroup Inc., Mizuho Financial Group Inc. and Royal Bank of Canada.
Photographer: Hollie Adams/BloombergBanks are asking investors to pay a premium to buy a loan to Belgium’s Infra Group, another sign that red-hot credit demand is turning normal market conventions upside down.
Usually, banks sell loans at a discount to face value as a way to entice investors. In this case, they’re estimating that the €140 million ($164 million) deal may price as high as 25 basis points above par, according to a person familiar with the matter, who asked not to be identified because the discussions are private.