Banks postpone mortgage sale for HIG’s U.S.-Canada IT merger

Article content material

A bunch of banks led by Bank of Montreal have postponed a US$1.1 billion mortgage sale that was to assist finance HIG Capital LLC’s deliberate buy of Canadian agency Converge Technology Solutions Corp., based on folks with information of the matter.

The lenders agreed to underwrite the debt earlier this 12 months, when HIG introduced it deliberate to merge portfolio firm Mainline Information Systems Inc. with Converge. The mixed agency can be known as Cardinal. The mortgage sale had struggled to draw demand, Bloomberg beforehand reported. Lender commitments for the mortgage had been due April 1.

A consultant for BMO declined to remark, whereas HIG and Converge weren’t instantly out there to remark.

Investors have shied away from dangerous debt choices in current days as U.S. President Donald Trump’s tariff plan has stoked recession fears and despatched danger property plunging. Lenders usually promote credit score they’ve dedicated for an acquisition earlier than a deal closes, however some face the prospect of being left with so-called hung debt in the event that they shut earlier than financing may be syndicated to buyers, forcing the banks to fund the loans.

U.S. leveraged-loan costs had their largest two-day drop in 5 years to finish final week, based on a Morningstar LSTA index. Average costs are at 95 cents on the greenback, the bottom since November 2023.

There had already been six U.S. leveraged-loan offers pulled from syndication this 12 months, based on Bloomberg-compiled knowledge, the latest being in mid-March.

In current days, an try and refinance US$660 million of junk debt for Chuck E. Cheese proprietor CEC Entertainment has additionally struggled with buyers whereas efforts to refinance greater than US$5 billion of personal credit score loans from Finastra Group Holdings Ltd. fell aside.

Bloomberg.com

Share this text in your social community