Investors are getting a glimpse of the $9.4 billion jumbo financing package backing the buyout of Worldpay Inc., ahead of the official debt sale slated for next week. Arrangers have initiated a pre-marketing process, inviting both euro and dollar investors to participate, according to sources familiar with the matter. A positive response could potentially expedite the sale. The much-anticipated deal includes $8.4 billion in funded leveraged loans and high-yield bonds, with the remaining $1 billion set as a revolving credit facility.
The financing package, supporting GTCR's acquisition of a majority stake in Worldpay, is the most substantial since Wall Street agreed to lend $13 billion to facilitate Elon Musk's takeover of Twitter last year. A successful debt sale could stimulate a resurgence in mergers and acquisitions, possibly leading to more jumbo deals.
JPMorgan Chase & Co. (NYSE:JPM) is courting dollar investors with approximately $6.4 billion of the Worldpay debt, while Goldman Sachs Group Inc (NYSE:GS). is marketing a portion equivalent to about $2 billion for euro investors. A segment of the Goldman-led debt may also be offered to investors focusing on sterling-denominated assets.
The debt may be evenly divided between loans and bonds, but the final ratio could shift as arranging banks, including Citigroup Inc (NYSE:C)., Wells Fargo (NYSE:WFC) & Co., Deutsche Bank AG (NYSE:DB), and UBS Group AG (SIX:UBSG), leverage different markets against each other to secure the best deal for the borrower. Loan pricing is expected to range from high 300 basis points to low 400s over the benchmark, with an upfront discount of approximately 200 basis points.
Spokespeople for Goldman, JPMorgan, GTCR, Citi and UBS declined to comment on the matter. Representatives from Wells Fargo and Deutsche Bank did not immediately respond to requests for comments.
The upcoming quarter promises a growing pipeline for mergers and acquisitions as market conditions stabilize and banks manage their hung debt. This development follows a period of new deal drought last year when banks grappled with billions in commitments on their balance sheets amid investor aversion to riskier assets and valuation disagreements due to rising interest rates and soaring inflation.
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