By Yun Li and Michelle Sierra
NEW YORK, Sept 18 (LPC) - The US$9.25bn in term loans backing private equity firm Blackstone Group’s purchase of a 55% stake in Refinitiv, Thomson Reuters’ Financial and Risk (F&R) division, allocated and broke for trading on Tuesday.
The US$6.5bn seven-year term loan B broke at 100.125-100.5 on Tuesday, while the US$2.75bn-equivalent euro-denominated facility broke at 100.125-101.
“It seems like it’s good demand,” said a portfolio manager. “People got cut back but not really dramatically. It didn’t leave people feeling burnt or upset. I think people got what they wanted.”
The issuer increased the loan package this week to US$9.25bn from US$8bn and reduced the high-yield bonds after a strong response from the market allowed pricing to be cut and minor investor-friendly changes to be made to the documents.
The deal is the biggest buyout of the year and the largest to be completed since the financial crisis.
“It’s actually very healthy in size,” said the manager. “Sometimes people put in big numbers in big deals and the demand is not really there, but here it looks like people still care.”
The US$6.5bn seven-year term loan B financing was increased from US$5.5bn, and the US$2.75bn-equivalent seven-year euro-denominated facility was upped from US$2.5bn, as previously reported by LPC.
The dollar tranche priced at 375bp over Libor, down from original guidance of 400bp-425bp, with a 25bp step-down at 3.75 times net first-lien leverage. There is no Libor floor on this tranche.
The euro loan priced at 400bp over Euribor, lower than original guidance of 425bp, with a 25bp step-down at 3.75 times net first-lien leverage. This tranche includes a 0% floor.
Both tranches sold with an OID of 99.75 compared with original guidance of 99-99.5.
Bank of America Merrill Lynch, JP Morgan, Citigroup, Wells Fargo, Morgan Stanley, Goldman Sachs, UBS, Credit Suisse, HSBC, Deutsche Bank, Barclays, Royal Bank of Canada and Sumitomo are the lenders. BAML is left lead on both TLBs.
The loans have six months soft call protection at 101. The facility amortizes at 1% a year.
Blackstone announced on January 30 that it was buying a 55% majority stake in Thomson Reuters’ F&R unit, which includes LPC. The unit will be renamed Refinitiv.
Corporate family ratings are B3/B/BB, while facility ratings are B2/B/BB. (Reporting by Yun Li and Michelle Sierra Editing by Jon Methven and Jonathan Schwarzberg)