October 30, 2017 / 1:47 PM / in a year

Investors sounded on jumbo Paysafe buyout loan before sell down

LONDON (Reuters) - A select group of investors have been sounded out on a jumbo $2.59 billion-equivalent loan backing the buyout of UK payment processing company Paysafe PAYS.L, banking sources said.

A Paysafe booth is shown on the exhibit hall floor during the Money 20/20 conference in Las Vegas, Nevada, U.S. on October 24, 2017. REUTERS/Steve Marcus

Paysafe, formerly Optimal Payments, which offers pre-paid cashcards and online wallets, announced in August that it had backed a £3bn takeover offer from a consortium of funds managed by Blackstone and CVC.

Credit Suisse, Jefferies and Morgan Stanley are leading the multi-currency leveraged loan financing, which was shown in a pre-marketing process to friend and family investors in mid-October ahead of a general syndication process, the sources said.

General syndication is expected to launch in November, the sources added.

The financing has been eagerly anticipated by investors, desperate to put large amounts of cash to work in new paper, after significant fund-raising from new and warehousing CLOs and managed accounts.

The financing includes $2.09 billion-equivalent of first-lien loans comprising a $505 million seven-year term loan B1; a $505 million-equivalent seven-year euro-denominated term loan B2; a £342.5 million seven-year term loan B3; a £342.5 million seven-year term loan B4; and a US$175m six-year multicurrency revolving credit facility.

The TLBs pay an initial margin of 300bp over Libor/Euribor. Between 4.5-5.0 times they pay 325bp and over 5.0 times, 350bp.

The TLB1 and TLB3 have 1% Libor floors, while the TLB2, TLB4 and RCF have 0% Euribor/Libor floors. The TLBs have a 50bp OID.

There are also $ 500million-equivalent of eight-year second-lien facilities, comprising a US$250m facility and a US$250m-equivalent euro-denominated facility.

The second-lien facilities pay 750bp over Libor/Euribor and have a 0% Libor/Euribor floors, with a 275bp OID.

Blackstone and CVC initially approached Paysafe in early May and made four separate bids before the fifth offer was agreed.

Editing by Christopher Mangham

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