Banks line up to finance $18.4b Origin takeover

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Banks are lining up to participate in the debt required to finance Brookfield and EIG Partners’ $18.4 billion takeover of Origin Energy.

to lend the companies money, given they are advising Brookfield. But to share the risk, other banks are talking to the advisers about a role on short-term bridge loans, which will likely come with 12-18 month tenors, people familiar with the deal said.

Eventually, the bridge debt will be sold to institutional capital markets. This could be in the form of US dollar-denominated syndicated loans or bonds.Debt capital markets, however, are somewhat strained as investment banks and their clients come to grips with higher borrowing costs. Bankers are seeking the right window to sell debt they underwrote earlier this year before launching new deals in the capital markets. Banks need to find room on their own balance sheets and an ideal time when bond and loan investors will find the risk more palatable.

“Bank risk appetite is reduced right now, but that will change as visibility on the outlook improves,” James McKenna, managing director and head of global capital markets for Australia at Morgan Stanley, told the“We are going to find a way to get deals done even if markets remain challenging.”Bankers are also buoyed by remarks from Brookfield and EIG around the due diligence of Origin.

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Uncertain whether this meets UNEP_FI commitments by the banks.

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