September 12, 2018 / 3:05 PM / 3 months ago

Refinitiv accelerates Blackstone buyout financing

LONDON (IFR) - Refinitiv has accelerated the loan part of its US$13.5bn debt package backing its takeover by Blackstone, the largest buyout since the financial crisis, while retaining the expected bond pricing date.

Commitments on the US$8bn loan have been accelerated to Friday from September 17 and bond roadshow meetings in Amsterdam and Paris were canceled.

But bond roadshow meetings in London will still take place on Thursday and Friday, while the deal is expected to price next week on September 18, unchanged from the initial schedule, according to sources.

“The reason the bond books are being kept open until next week is to see if the size of the euro books grow,” said another source familiar with the deal.

Sources said that the US dollar tranches of the bond are seeing good demand relative to the euros.

The bond includes US$2bn and US$1bn-equivalent euro-denominated 7.5NC3 senior secured first-lien tranches, and US$1.8bn and US$700m-equivalent euro-denominated 8NC3 senior unsecured bonds. Initial price thoughts are low 7s, 5% area, low 9s, and 7% area, respectively.

“The feedback we found was that the euro books are not at deal size and that leads were contemplating shifting some of the euros to dollars,” said a bond investor in London.

Investors said they were concerned about the company’s complicated business model with high adjustments, and that the deal documentation was aggressive.

“The covenants were so bad that it’s not even worth our time,” said a London-based fund manager.

The first investor said competition with Akzo Nobel’s €1.385bn bond is also having an impact. Akzo Nobel’s specialty chemicals business is marketing the deal as part of the financing backing its takeover by Carlyle and Singaporean wealth fund GIC, which also includes €5bn in loans.

“I spoke to one of the leads the other day and asked if people are viewing these as one or the other. The answer was: yes,” the London-based investor said.

Thomson Reuters’ Financial and Risk business, which includes IFR, will be renamed Refinitiv following the close of the acquisition by Blackstone.

A total of 25 banks are involved in the deal, with JP Morgan the sole physical bookrunner and B&D for the bonds.

(This version of the story has been refiled to add missing comma.)

Reporting by Yoruk Bahceli; additional reporting by Max Bower and Natalie Harrison; editing by Alex Chambers, Julian Baker, Ian Edmondson

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