(Bloomberg) — A group of banks led by Bank of Montreal have postponed a $1.1 billion loan sale that was to help finance HIG Capital LLC’s planned purchase of Canadian firm Converge Technology Solutions Corp., according to people with knowledge of the matter.
The lenders agreed to underwrite the debt earlier this year, when HIG announced it planned to merge portfolio company Mainline Information Systems Inc. with Converge. The combined firm would be called Cardinal. The loan sale had struggled to attract demand, Bloomberg previously reported. Lender commitments for the loan had been due April 1.
A representative for BMO declined to comment, while HIG and Converge weren’t immediately available to comment.
Investors have shied away from risky debt offerings in recent days as US President Donald Trump’s tariff plan has stoked recession fears and sent risk assets plunging. Lenders typically sell credit they’ve committed for an acquisition before a deal closes, but some face the prospect of being left with so-called hung debt if they close before financing can be syndicated to investors, forcing the banks to fund the loans.
US leveraged-loan prices had their biggest two-day drop in five years to end last week, according to a Morningstar LSTA index. Average prices are at 95 cents on the dollar, the lowest since November 2023.
There had already been six US leveraged-loan deals pulled from syndication this year, according to Bloomberg-compiled data, the most recent being in mid-March.
In recent days, an attempt to refinance $660 million of junk debt for Chuck E. Cheese owner CEC Entertainment has also struggled with investors while efforts to refinance more than $5 billion of private credit loans from Finastra Group Holdings Ltd. fell apart.
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