Deutsche Bank underwrites SAP's acquisition financing - sources

By Sandrine Bradley LONDON (Reuters) - Deutsche Bank has underwritten 7 billion euros (5.50 billion pounds) in loans to back German business software maker SAP's , $7.3 billion acquisition of US-based expense management software firm Concur Technologies , sources close to the deal said. Deutsche Bank is the sole underwriter and adviser on the loan and it is the biggest underwrite by a single bank for a European loan so far this year, according to Thomson Reuters LPC data. The deal is the latest major M&A transaction to provide a boost to a loan market weary from the grind of cut-price refinancing. SAP has a good track record for repaying acquisition debt quickly through cash flow and bond issuance. It agreed a 1 billion euro term loan for its takeover of SuccessFactors in December 2011, which was fully repaid by November 2012. The company then agreed a 2.4 billion euro term loan in May 2012 to back its acquisition of Ariba that was fully repaid by December 2012, while its acquisition of hybris in June 2013 was backed with a 1 billion euro term loan that fully repaid by December 2013. According to one of the sources it is expected that this new loan will be repaid through a bond or a private placement. “SAP has a history of transforming loans into bonds,” the source said. “This loan is likely to be repaid with a Eurobond or through a US private placement.” Deutsche Bank and SAP declined to comment. This latest deal for SAP follows the 12.5 billion euro acquisition financing for ZF Friedrichshafen, also underwritten by Deutsche Bank alongside Citigroup, to back the German car maker’s takeover of US-based TRW Automotive , which was announced earlier this week. These deals fuel hope for a strong flow of M&A in Europe as shareholders are encouraged to invest the cash they have stockpiled during the financial crisis. Simultaneously banks can offer extremely favourable terms on both bridge loans and longer-term loan financing, further incentivising companies to press the button on M&A. (Editing By Christopher Mangham)