Investcorp Signs Record New Five-Year Facility

Bahrain, 8 January 2005 – Investcorp, the global investment group, today announced the signing of a new $474 million five-year financing facility.

The facility, a fully funded five-year bullet maturity, was primarily self arranged by Investcorp and is the Firm’s largest ever balance sheet financing. The facility was launched at $200 million, but strong interest from new and existing lenders raised commitments of more than two times the initial target.

A total of 34 banks participated in the financing, with strong support from existing relationship banks supplemented by the addition of seven first-time lenders to Investcorp. Participation was well diversified from a regional and geographic perspective, with 72 percent of the financing raised from UK and European lenders, 17 percent from Middle East/North Africa (MENA) lenders, and 11 percent from Asian lenders.

A portion of the proceeds from the new facility have been used to early refinance existing debt that was maturing in mid-2005. The balance will be utilized for general corporate purposes and to further augment Investcorp’s significantly large pool of available liquidity, now representing over 50 percent of the asset base. Investcorp continues to manage its total level of outstanding debt at conservative levels, with a modest leverage target of two to three times.

This recent financing follows a $142 million five-year facility focused on North American relationship banks and a $42 million five-year facility focused on new Asian relationship banks, both of which closed in July 2004. In addition, Investcorp further extended its maturity profile through the issuance of $112 million in long-term notes to North American and European lenders in July and November 2004. Investcorp’s average liability maturity now stands at over five years, with less than $40 million of committed debt maturing in the next 18 months.

Investcorp’s strong funding and liquidity profile underpin the recent reaffirmation of the Firm’s investment grade ratings, including an upgrade to A - by Capital Intelligence.

Nemir A. Kirdar, Investcorp’s President and Chief Executive Officer said: "Strong contributions from new lenders and an excellent overall response to the facility allowed us to more than double the figure which was initially targeted.

"Investcorp continues to diversify its funding sources and strengthen its balance sheet, and this facility, funded by leading global financial institutions, is our largest fully-funded facility so far. We are delighted at the broad support the facility has received, which underlines the international community’s confidence in the Firm. We would like to thank all those involved for their efforts in making this facility a truly landmark transaction for Investcorp."

He added: "Together, these recent financings add significant liquidity and flexibility to our business model and underscore the strength of our balance sheet and depth of our financial relationships."

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