The Zhitong Finance App learned that the bank promoting a 550 million euro (approximately US$616 million) loan refinancing for European energy infrastructure and service company Iqony withdrew the deal because it failed to attract sufficient investor interest amid wider market turmoil.
According to people familiar with the matter, who did not wish to be named, Goldman Sachs Group (GS.US) and Santander Bank (SAN.US) led the loan, which has been withdrawn from the syndicate. This is the second transaction that has been withdrawn from the European leveraged finance market in the past week. Previously, various lenders cancelled plans to sell a loan to finance Partners Group's acquisition of Aroma-Zone.
Weak risk appetite hit the European junk bond market hard this fall. Interest spreads between the highest rated and lowest rated debt hit the widest level since 2009, as investors feared the impact of artificial intelligence disruptions, high interest rates, and soaring energy costs on the region's most indebted corporate borrowers.
People familiar with the matter added that demand may also be influenced by Iqony's owner, Asterion Industrial Partners, a lesser known sponsor.
People familiar with the matter added that although this is a refinancing, the proposed loan for the Essen, Germany-based company is a new deal for investors as it aims to refinance the debt of a banking club. The existing debt will remain unchanged.
The transaction was an opportunistic operation. The bank underwrote (consignment) the bank did its best, which meant that it was not underwritten and no balance sheet was used. However, market participants said that it is rare for BB-rated transactions to be withdrawn.
Banks initiated this refinancing last month, and investors' subscription commitments were originally scheduled to end on October 23.
Spanish infrastructure investor Asterion bought Iqony in 2023.