Banks Holding Morrison Buyout Debt Consider Sterling Bond Dump

 

The leading bank backing financing the acquisition of Wm Morrison Supermarkets PLC is considering taking off a chunk of its debt at a steep discount. Execute the new deal to give investors more satisfaction ahead of a much-anticipated broader sell-off.

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Lenders, including Goldman Sachs Group Inc. and BNP Paribas SA, are in talks with. The credit fund is set to place 1.2 billion pounds ($1.5 billion) in sterling secured upfront, according to people close to the matter,

who requested anonymity as conversations privately held private equity firm Clayton. Dubilier & Rice's £6.6bn acquisition of grocers is the largest British acquisition in more than a decade.

This offer is the latest in a long-standing story about supermarket financing. The bank defaulted on the contract in August. This is a period when the market is more favorable to borrowers. However, since then,

conditions have deteriorated greatly. In February, banks privately allocated the riskiest part of the debt - £1.2bn of secured notes - to the CCPIB, but only received a 20% fee.