When Anglo-Australian mining giant BHP Billiton attempted an audacious $150bn takeover of its main rival Rio Tinto in late 2007, getting financing for the deal was virtually an afterthought. Despite BHP wanting a huge debt package to fund the bid, which it would back away from a year later as the global economy slumped, it had no doubt it could count on its relationship banks to stump up the cash. One capital markets banker close to BHP says a group of just seven lenders had agreed to underwrite a $55bn loan barely 12 hours after the company put in its first calls to them.
Sadly for corporate borrowers, those days are gone. While most large-cap European companies are still able to get merger and acquisition (M&A) funding from their banks, the process is more complicated and requires them to address the issue at a far earlier stage.
