NEW YORK, Aug 28 (LPC) - Syndication of the US$8bn-equivalent loan package backing Blackstone’s buyout of Refinitiv, Thomson Reuters’ Financial and Risk (F&R) division, is expected to launch on September 4 in the US after the Labor Day holiday, bankers close to the deal said.
The facility comprises a US$5.5bn seven-year Term Loan B (TLB) and a US$2.5bn seven-year euro-equivalent TLB.
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.
The debt package also includes US$5.5bn-equivalent in bonds expected to launch to investors at the same time.
Syndication of the US$13.5bn debt package is anticipated to tap the market in Europe on September 3, the sources said. The deal is the largest buyout financing since the crisis and its launch has been eagerly awaited since the deal was underwritten in January.
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.
Lead banks began marketing the US$8bn-equivalent in TLBs and a US$5.5bn-equivalent bridge loan to large institutional investors in late June, as previously reported by LPC. BAML is leading the loans and JP Morgan the bonds.
The financing package is largely unchanged, bankers said, despite a softening in the market in the early summer in Europe as investors took a tougher line with arranging banks amid a surge in supply.
Indicative pricing on Thomson Reuters’ term loans is 400bp, LPC previously reported.
Ebitda adjustments and leverage for Thomson Reuters’ F&R division have not undergone any material changes from the previously reported numbers of US$650m and leverage of roughly 6.0 times, respectively, which takes the business’s Ebitda from the US$1.7bn reported number to near US$2.4bn, according to a senior leveraged finance banker.
Leverage was previously expected to be around 4.5 times through the secured debt and 5.6 times total debt after Ebitda adjustments, which could be as much as 30%, as the transaction is a carve-out and involves reallocating costs.
The deal also includes US$1bn of preferred equity – with a 14.5% Payment-In-Kind (PIK) coupon – US$3bn of cash equity from Blackstone and US$2.5bn of existing equity, based on the F&R unit’s US$20bn valuation, that will be rolled over.
Additional reporting by Kristen Haunss. Reporting by Michelle Sierra Editing by Jon Methven