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Bridgepoint buys back UK clothing store debt

The buyout firm acquired the debt relating to its £360m buyout of UK clothing chain Fat Face.

Bridgepoint, a European buyout firm, has bought back 5.3 percent of the debt relating to its buyout of UK clothing retailer Fat Face, according to a source in the debt markets.

The firm bought debt with the nominal value of £10 million (€12.6 million; $19.7 million) from the £190 million transaction, underwritten by French bank BNP Paribas. Bridgepoint bought the active clothing company, which has more than 140 stores in the UK and internationally, including in SIngapore, Kuala Lumpur and Kuwait, for £360 million last year from Advent International.

Bridgepoint’s spokesman said: “We can confirm we are now holders of a small amount of debt in Fat Face.” He declined to comment further. The firm bought the debt at 60 percent to 65 percent to face value, according to the Financial Times. The debt market source said Bridgepoint was holding the debt through its fund.

Several firms have attempted to buy debt from their funds for deals in which they have invested. Kohlberg Kravis Roberts considered buying debt related to its buyout of UK pharmacy chain Alliance Boots, according to its spokeswoman, although it is unknown whether it was allowed to complete the deal.   

Bridgepoint’s tactic is questioned by some lenders, who believe it can lead to potential conflicts of interest. Debt buy-backs generally are being examined by the Loan Market Association, a debt market industry body.