The thaw spreading across credit markets on a reprieve from U.S.-China trade tensions has lured back at least one borrower, Brookfield Properties Retail, as it greenlights two debt sales shelved in April.
The property manager revived a combined US$3.2 billion in debt sales this week, a little over a month after U.S. President Donald Trump’s tariff blitz froze new deals. Debt markets have since rebounded as Trump walked back some of his levies, prompting strategists and economists to brighten their economic outlooks and some borrowers to return.
Brookfield was one of several companies where attempts to raise debt were scuttled last month. Other stalled financings included $2.35 billion supporting the buyout of Patterson Cos Inc. by Patient Square Capital and a $1.1 billion leveraged loan supporting HIG Capital’s purchase of Toronto-based Converge Technology Solutions Corp.
Now, banks are seizing on the relative calm in markets to pitch investors the billions of dollars of debt they hadn’t been able to offload earlier this year. If the the deals are well-received it could be a signal for other borrowers to restart deals put off at the height of Trump’s trade offensive.
On Tuesday, Brookfield resurrected a $2.4 billion debt package to refinance a sprawling mall and office complex in Honolulu, according to a person familiar with the deal. Morgan Stanley and several other banks are working on the commercial mortgage backed security sale, they said.
Wednesday brought another deal when Brookfield launched an $800 million leveraged loan to refinance existing debt due later this year, according to a person familiar with the matter. An earlier attempt to launch a slightly larger loan was halted last month.
Pricing on the new loan issuance is being discussed at 3.25 to 3.5 percentage points over the Secured Overnight Financing Rate (SOFR) and a discounted price of 98 to 98.5 cents on the dollar, the person said. The price talk is the same as when Brookfield last attempted to bring what was then an $885 million loan, though those terms had been sweetened from original discussions.
The market “has recovered sufficiently to pursue the opportunistic financing,” a spokesperson for Brookfield said Tuesday, referring to the Hawaii deal. Brookfield didn’t immediately respond on Wednesday to an another request for comment.
A representative for Morgan Stanley declined to comment while Wells Fargo & Co., which led banks on the leveraged loan, also declined to comment.
Rachel Graf, Jeannine Amodeo and Scott Carpenter, Bloomberg News
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