European leveraged finance cools: second pulled deal in a week as Iqony's 550 million refinancing falls through

Banks marketing a 550 million (about $616 million) loan refinancing for European energy infrastructure and services company Iqony withdrew the deal after failing to attract sufficient investor interest amid broader market turmoil. Goldman Sachs Group, Inc. (GS.US) and Banco Santander S.A. Sponsored ADR (SAN.US) led the loan, which has been pulled from syndication, according to people familiar with the matter who declined to be identified. It is the second deal withdrawn from Europe's leveraged finance market in the past week. Previously, lenders canceled plans to sell a loan financing Partners Group's acquisition of Aroma-Zone. Weak risk appetite has dealt a heavy blow to Europe's junk bond market this autumn, with the spread between the highest-rated and lowest-rated debt reaching its widest level since 2009, as investors worry about the impact of AI disruption, high interest rates and surging energy costs on the region's most heavily indebted corporate borrowers. Demand may also have been affected by the fact that Iqony's owner, Asterion Industrial Partners, is a lesser-known sponsor, the people familiar with the matter added. Although it is a refinancing, the proposed loan for the Essen, Germany-based company is a new deal for investors because it is intended to refinance debt from a bank club, the people familiar with the matter added. The existing debt will remain unchanged. The deal was an opportunistic move, arranged by banks on a best-efforts (agency) basis, meaning it was not underwritten and no balance sheet was used. However, market participants said it is rare for a BB-rated deal to be withdrawn. Banks launched the refinancing last month, with investor commitments originally due by October 23. Spanish infrastructure investor Asterion acquired Iqony in 2023.