Asian lenders are bracing for a landmark leveraged buyout after British retailer Tesco extended the deadline for bids for South Korean unit homeplus and more lenders committed to a stapled financing. A W4.4trn (US$3.7bn) staple, comprising W3.8trn senior and W600bn mezzanine tranches, is on the table for prospective bidders. Both tranches are the largest of their kind so far in Asia. Traditionally, financial sponsors have relied on the strong liquidity in Asian loan markets to fund their buyouts and stapled financings in Asia have therefore been few and far between. However, with domestic banks expected to dominate the ultimate debt package for the buyout, foreign lenders are throwing their weight behind the staple. Last week, ANZ and SMBC joined BNP Paribas and HSBC, the original providers of the staple.
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