Banks are looking to sell $2.25 billion of term loans and $2 billion equivalent of bonds for Boots, to help finance its acquisition by US private equity firm Sycamore Partners, according to people familiar with the matter.
The long anticipated sale of the leveraged loans for the UK pharmacy chain launched on Monday and comprises a $1 billion term loan B denominated in euros, $750 million in dollars and $500 million in sterling.
Simultaneously, banks have started marketing senior secured bonds in euros, sterling and dollars as well. They will look to raise $750 million-equivalent each from the euro and sterling tranches and $500 million from the dollar sale.
The deals are part of a larger financing package that will also include private credit facilities to support the takeover of Walgreens Boots Alliance Inc., one of the largest leveraged buyouts since the global financial crisis.
Some 17 banks gained a spot on the buyout financing, work which offers some of the most lucrative fees in investment banking. It comes as a welcome relief after a spate of opportunistic refinancings and repricings that have dominated issuance so far this year, grunt work that pays little and offers no glamor.
Fast Execution
Banks are looking for a quick turnaround on the loan sale, with commitments due July 22 on the euro and sterling tranches and Monday July 21 on the dollar tranche, looking to attract commitments quickly before the typical summer slowdown that hits continental Europe. Typically, the syndication process can take around two weeks.
Goldman Sachs Group Inc. is serving as the sole bookrunner on the euro and sterling bonds while UBS Group AG is the sole bookrunner for the seven-year dollar notes. An investor call is scheduled for July 15 at 2 p.m. UK time.
JPMorgan Chase & Co. is the lead left bookrunner on the term loans. An investor call for those is scheduled for 3 p.m. in the UK on Monday.
The lenders started pre-marketing Boots’ financing to a select group of investors in early July, having underwritten the debt earlier this year. Banks are looking to capitalize on a red-hot leveraged finance market on both sides of the Atlantic. With M&A activity still subdued, the deal is expected to attract strong investor interest as one of the few fresh offerings in the pipeline.
This story was produced with the assistance of Bloomberg Automation
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