September 12, 2018 / 10:03 PM / in 2 months

U.S. dollar bonds backing Refinitiv buyout oversubscribed: sources

NEW YORK (IFR) - Books on the US dollar high-yield bonds that will help finance the buyout of Refinitiv by Blackstone are oversubscribed, three bankers familiar with the deal told IFR.

Based on this strong response the US dollar bonds could price earlier than scheduled on Friday, said two bankers on the deal. The last official update to the market was that the bond would price next Tuesday.

The US$5.5bn-equivalent high-yield bond financing includes two US dollar tranches: a US$2bn 7.5-year non-call three senior secured first-lien bond, and a US$1.8bn eight-year non-call three senior unsecured bond.

Initial price thoughts were low 7% area on the secured and low 9% area on the unsecured bond respectively.

But one of the bankers said the unsecured bond could price with an 8% handle.

“I’m hearing as tight as 8.5% and as wide as 8.75%.”

The bond deal also includes two euro-denominated tranches with the same maturities and seniority. They were announced at US$1bn-equivalent for the 7.5NC3, and US$700m-equivalent for the 8NC3, but sizes of the bonds across US dollar and euros could change, one of the bankers said.

Initial price thoughts on the euro tranches were announced at 5% area and 7% area respectively.

It is not clear whether books for the euro-denominated bonds are oversubscribed yet. Bond roadshow meetings in London will take place on Thursday and Friday, but meetings in Amsterdam and Paris were canceled, other sources told IFR.

“The European high-yield bond market is not as deep, but the US market is very constructive and we expect that to continue,” said one of the bankers.

“There’s no question the junior capital demand is deeper in the US than it is in Europe,” said another.

The bonds are part of a bigger US$13.5bn-equivalent overall debt package that also includes US$8bn of loans. Commitments on the loan have been accelerated to Friday from September 17.

The financing backs private equity firm Blackstone’s purchase of a 55% stake in Thomson Reuters’ financial data and technology division (which includes IFR), which will be renamed Refinitiv when the acquisition closes.

The deal - the largest buyout financing since the crisis - is expected to close on October 1.

JP Morgan is leading the high-yield bond, while Bank of America Merrill Lynch is leading the loan financing.

Citigroup, Wells Fargo, Morgan Stanley, Goldman Sachs, UBS, Credit Suisse, HSBC, Deutsche Bank, Barclays, Royal Bank of Canada and Sumitomo are also lenders.

Reporting by Natalie Harrison; Additional reporting by Michael Gambale; Editing by Shankar Ramakrishnan

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