Bloomberg News

Babson Loan Fund Postpones IPO on ‘Uncertainty’ in Europe

October 27, 2011

(Updates with target amount in third paragraph)

Oct. 25 (Bloomberg) -- Babson Capital Europe Ltd. and Babson Capital Management LLC postponed a plan to sell shares in a new loan fund on the London Stock Exchange amid “uncertainty” in the European market.

“Although the offering was met with good investor interest, the fund believes that in the current market conditions, particularly the uncertainty surrounding the European financial situation, it was not appropriate to proceed,” Babson said today in a regulatory filing.

Babson Capital Global Floating Rate Loan Fund Ltd. last month proposed to raise at least 125 million pounds ($174 million) by listing shares in London. The money manager offered investors an annual gross return of 8 percent to 11 percent by investing in European and U.S. senior and second-lien loans, floating-rate notes and high-yield bonds.

Babson delayed the share sale plan for its loan fund after companies canceled or postponed $8.9 billion in initial public offerings in the third quarter as stocks plunged.

Growing doubt about policy makers’ ability to contain Europe’s sovereign debt crisis and avert a double-dip recession has doused investor demand for high-risk assets and wiped out $6.3 trillion from global stock markets. The European Central Bank offered euro-area banks unlimited 12-month loans, reintroducing a tool it last used in December 2009 to calm financial markets.

--Editors: Faris Khan, Cecile Gutscher

To contact the reporters on this story: Maria Ermakova in london at mermakova@bloomberg.net; Patricia Kuo in London at pkuo2@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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