A wide-open leveraged loan market in September has spurred new-issue supply backing dividend recapitalizations to the highest level on record for sponsored issuers. This month’s volume through Sept. 24 skyrocketed to $17.4 billion, bolstered by a massive cross-border undertaking from Belron. That is by far the most for any single month in the US loan market — the prior high was $13.4 billion in July 2021.
With that, year-to-date dividend recap volume is also setting a record pace at $69.3 billion through Sept. 24, ahead of the $66.4 billion over the comparable period in 2021 and closing in on 2021’s all-time annual high of $76 billion.
The marquee deal, of course, is Belron (BB-/Ba3/BB), which this week launched the largest dividend recapitalization transaction of all time. The UK-based provider of auto glass repair is pitching investors a €6.25 billion-equivalent cross-border term loan B financing ($4.69 billion, €2.05 billion tranches) that will be joined by $1.1 billion and €850 million of other secured debt. Proceeds from the financing, together with €515 million of cash on the balance sheet, will repay €4.258 billion of outstanding term loans and fund a €4.357 billion shareholder dividend.
Belron edges out a 2021 deal from Hellman & Friedman’s Verisure ($6.35 billion equivalent across euros and Swedish krona) for the largest global dividend recap deal ever by total transaction size, including loan and bond financing. Looking at deals that were marketed in the US, the next largest transaction after Belron was the $5.3 billion deal in 2019 for Staples and sponsor Sycamore Partners.
