​Refinancing rush inundates firms

Peter Godfrey
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Firms are dealing with a sharp increase to their workloads as companies and funds refinance themselves, taking advantage of advantageous market conditions.

Improved liquidity and more favourable pricing were contributing to the spike in activity.

According to Sparke Helmore partner Nick Humphrey, cheaper finance and an increase in competition between the major banks have been key driving forces.

“We are much busier than we were 12 months ago.  It’s one of the busiest patches of work I’ve ever been in.  We’re really overrun with work and it’s coming from big companies too,” Humphrey told Australasian Lawyer

Humphrey explained that entities were refinancing now in order to buy more time so that they could better prepare for maturing dates, future sales or IPOs.   

Humphrey also noticed that the size of refinancing deals had increased. 

King & Wood Mallesons partner Jeff Clark, who recently led a $745 million refinancing, believes that the increase in work was likely to continue for as long as current market conditions continued. 
He believes much of the refinancing work has been centred on deals put in place three of four years ago as the Global Financial Crisis was beginning to wind down.

KWM advised Southern Way, owner and operator of the Peninsula Link freeway in Melbourne on the $745 million refinancing of its finance facilities.

According to Clark the deal was part of a current refinancing trend for deals closed in the height of the GFC, particularly infrastructure and PPP projects. 

In a separate deal KWM also advised global manufacturing and heavy engineering group, Bradken Limited, on the refinancing of their syndicated bank debt facilities.