Shinhan arranges $120 mn loan for Cerberus US deal

Shinhan Financial Group has arranged a $120 million loan to finance Cerberus Capital Management’s acquisition of operations in a leading US-based bottle and container closure manufacturer, the South Korean banking group said on Nov. 10.

The lending is part of a $450 million financing package arranged for Cerberus to buy some operations of Closure Systems International in a deal worth $800 million.

Credit Suisse was the single underwriter of the acquisition financing deal and mandated Shinhan Financial to underwrite the $120 million loan, a Shinhan source told The Korea Economic Daily.

Shinhan sold down the loan to domestic institutional investors: $80 million to mutual aid associations and $40 million to Shinhan Group units. But Shinhan Financial Group's global investment banking division, which handles debt financing, did not participate in the lending.  

“Even in the COVID-19 situation, everyone still drinks beverages and there has been little change to its sales,” said the Shinhan source.

Given the difficulty of conducting on-site due diligence for overseas investments, Shinhan has been focusing on assets that produce a steady stream of income, he added.

Last December, Cerberus announced that its affiliates have completed the acquisition of the North American, Costa Rican, and Japanese businesses and related facilities of Closure Systems International from affiliates of Reynolds Group Holdings Limited. It did not disclose the value of the deal.

To diversify beyond the retail-focused domestic market, the Korean financial group has been ramping up its global investment banking businesses, led by its three units — Shinhan Investment Corp, Shinhan Bank and Shinhan Capital.

Earlier this year, it arranged a $100 million syndicated loan from Korean investors to finance a US healthcare company acquisition deal. It has also participated in acquisition financing projects for Nestle’s sale of its skin health business to a private equity firm-led consortium in 2019, as well as for the sale of the company that owns Legoland.

Write to Daehun Kim at daepun@hankyung.com
Yeonhee Kim edited this article.