By Abhinav Ramnarayan and Isla Binnie

The private equity consortium behind the mooted acquisition of Spanish telecoms firm Masmovil has secured a 2 billion euro (1.80 billion pounds) loan towards that deal, helping revive a leveraged loan market that has taken a beating this year.

The seven-year loan, which will be issued by Masmovil but go towards financing a bridge loan taken to fund its buyout by Cinven, KKR and Providence, priced late on Thursday, according to a document seen by Reuters.

It is the first such deal to be completed after the COVID-19 crisis wrought havoc on the market in March and pushed the U.S. leveraged loan default rate to a six-year high.

The final amount is 500 million euros more than originally targeted.

"If we had done this deal in February, perhaps we would have got 2.5 or 3 billion (euros); but still it was the first deal underwritten after the virus and it shows that the market is open," a person familiar with the transaction said.

He and another person familiar with the matter said the buyers were mostly institutional loan investors and some in the collateralised loan obligations market, and that the deal was oversubscribed.

Other previously-agreed acquisitions such as the private equity buyout of ThyssenKrupp's elevators unit and AMS's purchase of Osram have found financing in recent weeks, but this leveraged loan is the first agreed after the crisis broke out.

Central bank stimulus has helped revive appetite for low-rated debt and give investors' confidence in such deals again, bankers said.

Masmovil has grown through acquisitions against fierce competition from Telefonica, Vodafone and Orange and owns low-cost brands Pepephone and Yoigo.

Sources familiar with the matter have said its prospective buyers aim to complete the deal in the last three months of this year. Providence already holds 9% of the company, whose board has backed the bid.

(Reporting by Abhinav Ramnarayan; Editing by Mark Potter)