Partners Group is restricting hedge funds and distressed-debt investors from buying loans issued by three struggling portfolio companies as it negotiates the refinancing of around €6bn in debt due in 2028, according to Private Equity Wire. The Swiss private equity firm is using approved lender lists to limit access to debt issued by French property services group Emeria, Dutch conveyor belt manufacturer Ammega and Swiss watchmaker Breitling, according to Private Equity Wire.
Approved lender lists used across three portfolio companies
Partners Group is described as Zug-based in the report, according to Private Equity Wire. The firm is using approved lender lists to limit who can hold loans issued by Emeria, Ammega and Breitling, according to the publication.
The restrictions are intended to prevent opportunistic investors from building positions that could give them greater influence over restructuring negotiations, according to Private Equity Wire. The report describes such provisions as “white lists,” and states they allow private equity sponsors to control which investors can hold a company’s loans.
Rationale: limiting distressed investors’ influence in restructurings
The report states that white lists are increasingly being used to prevent distressed-debt hedge funds from acquiring discounted debt and potentially pushing for creditor-friendly restructurings or control of the business, according to Private Equity Wire. The publication also states that the restrictions are designed to prevent opportunistic investors from building positions that could give them greater influence over restructuring negotiations.
The report adds that while such restrictions can protect creditors from aggressive restructuring tactics, including transactions that improve some lenders’ priority over others, they also reduce the pool of potential buyers and may limit liquidity, according to Private Equity Wire.
Widely known context: In leveraged finance markets, “white list” style transfer restrictions are a documented feature in some loan agreements and are used by issuers or sponsors to control secondary trading of debt.
Emeria, Ammega and Breitling: debt and trading levels cited
Emeria is negotiating with creditors over its €3.6bn debt burden, and Partners Group may be required to inject additional capital to secure a refinancing, according to Private Equity Wire. Ammega’s debt investors have also faced restrictions on accessing financial information and purchasing loans, according to the same report.
The measures could complicate exits for existing lenders as loan prices fall, according to Private Equity Wire. The publication reports that Emeria’s March 2028 term loan was quoted at around 70 cents on the euro, compared with 79 cents for Ammega’s December 2028 loan and 82 cents for Breitling’s October 2028 debt.
Workarounds mentioned: sub-participations and documentation provisions
Hedge funds can sometimes gain economic exposure through loan sub-participations arranged by banks, according to Private Equity Wire. The report also states that Partners Group’s loan documentation reportedly includes provisions that can restrict or cancel transactions where the ultimate investor is identified, according to the publication.
