(Bloomberg) -- A staggering 19 banks piled into a loan deal to fund an EQT AB-led purchase of video game services firm Keywords Studios Plc, underscoring intensifying competition among lenders for mandates in Asia.
JPMorgan Chase & Co., HSBC Holdings Plc and Citigroup Inc. are among the banks mandated to underwrite the five-year $1.14 billion loan, people familiar with the matter said. It is split into a $918 million term piece and a $225 million revolving credit facility, they said, asking not to be identified as the discussions are private.
Asian loan deals typically had a handful or so of underwriters in the past, but that number has ballooned now as the market is flushed with liquidity. The amount of lenders in the Keywords deal puts the spotlight on the dismal loan activity in the region.
Borrowers have put off fundraising plans due to high dollar interest rates and a bleak economic backdrop. Opportunities to finance leveraged buyouts have been few and far of late, resulting in such a deal being overcrowded.
Dollar loan volume, excluding bilateral facilities, tumbled 44% to about $45.5 billion in the first half of the year across Asia excluding Japan. That’s the lowest since 2010, according to data compiled by Bloomberg.
The syndicated facility, which will be marketed to more banks at a later stage, is expected to pay an interest margin of 400 basis points over the Secured Overnight Financing Rate, with fees as high as 300 basis points, the people said.
Keywords and EQT didn’t respond to respond to requests for comment outside of their business hours.
Earlier this month, Keywords agreed to an offer from a group led by Swedish private equity firm EQT that values the video game services company at about £2.1 billion ($2.7 billion). Canada Pension Plan Investment Board and Temasek Holdings Pte Ltd. are part of the consortium.
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