Leverage loan market sees second deal drawn in two days

(Bloomberg) – Digital marketing firm CM Group has become the second firm to pull off a leveraged loan sale in the United States in as many days as some investors who buy risky debt are becoming more selective in the midst of a wave of transactions at the end of the year.

The four-year-old company, which owns Campaign Manager and other email marketing platforms, has suspended a seven-year, $ 590 million offer to help fund its merger with Cheetah Digital Inc. and refinance existing debt, according to people familiar with the matter.

Senior arranger Jefferies Financial Group Inc. withdrew the transaction on Friday, two weeks after the commitments originally expired, said one of the people, who asked not to be identified because the talks are private.

The companies do not expect the withdrawal from the sale of the loan to derail the close of the acquisition, according to a separate person with knowledge of the matter.

Representatives for Jefferies, CM Group and Insight Partners, the majority owner of CM Group, did not immediately respond to requests for comment. A spokesperson for Vector Capital, majority owner of Cheetah, declined to comment.

Borrowers have raised billions of dollars in the loan market this year to fund everything from debt buybacks to payments to private equity owners. A year-end race to close acquisition financings started last week, but some investors are increasingly cautious about adding risk to their portfolios.

American Physician Partners also suspended a loan sale that had struggled to attract investor demand on Thursday, Bloomberg previously reported.

© 2021 Bloomberg LP

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