PE securitisation eliminates pier loan threat

Author: Danielle Myles | Published: 22 Nov 2012

The acquisition of a Bank of America business has been funded by securitising the target’s receivables, and without a bridge loan.

It’s a rare example of structured finance being used as the only debt tranche in an M&A deal, and comes at a time when bridge financing is difficult to come by.

Chicago-based private equity firm GTCR’s purchase of Premium Credit from MBNA Europe Bank on October 31 could signal the beginning of new acquisition finance options.

The deal appears to be the first time a rated securitisation has wholly-funded a significant acquisition, according to Sidley Austin’s John Woodhall, who acted for the bank consortium that funded the deal.

The notes issued under the £900 million...