(Bloomberg) -- $Citigroup Inc(C-N)$ and Banco Santander SA are readying a debt package of up to €4 billion ($4.2 billion) to back a potential sale of Spanish waste-management company Urbaser SA.

The two banks are both advising on the process and offering the so-called staple financing to any potential buyer of the Platinum Equity-owned firm, according to people familiar with the matter. With final bids due in early 2025, other banks are also working on debt financings to get a spot on the deal, the people added. 

Staple financings can make a sale process more attractive as they provide potential buyers with certainty of funds. However, staples are there to be beaten. With risk appetite back in Europe’s leveraged finance market as interest rates start to fall, bankers are offering aggressive debt packages in an effort to land some of the hefty fees generated by buyout deals.

After a number of lean years, Europe’s pipeline of leveraged finance buyouts for 2025 is starting to fill up. Urbaser is the latest to emerge in recent weeks amid signs of life coming back to the market, following debt packages for the take-private of Spanish pharmaceutical producer Grifols SA and the stake purchase in French drugmaker Sanofi. 

Spokespeople for Citi and Santander declined to comment. A representative for Platinum didn’t immediately respond to a request for comment. 

Buyout Packages

The financing package will likely include between €2.1 billion and €2.5 billion of funded debt, the people said, that will be split between term loans and high-yield bonds. That equates to around 4.5 times debt to earnings of €500 million, the people added. There will also be around €1.5 billion of unfunded debt, consisting of guarantees and revolving credit facilities, the people said.

Infrastructure bidders are among the potential buyers of the firm. Should that happen, financing could be more suited to the buyer, with an investment-grade component, according to one of the people. A shortlist of acquirers is expected to emerge shortly, a separate person said.

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