A group of banks led by Goldman Sachs Group Inc. and JPMorgan Chase & Co. launched a $4.4 billion debt sale to fund GTCR’s purchase of a majority stake in payment processor Worldpay Inc., one of the most hotly anticipated deals in the leveraged finance market this year.
(Bloomberg) — A group of banks led by Goldman Sachs Group Inc. and JPMorgan Chase & Co. launched a $4.4 billion debt sale to fund GTCR’s purchase of a majority stake in payment processor Worldpay Inc., one of the most hotly anticipated deals in the leveraged finance market this year.
The offering is split in two parts with JPMorgan leading a $3.4 billion portion, and Goldman managing the sale of a $1 billion-equivalent loan in euros, according to people with knowledge of the matter. A lender call is scheduled for Wednesday at 10 a.m. New York time, with commitments due on Sept. 21 at 5 p.m. New York time, the people said.
Chicago-based private equity firm GTCR agreed to purchase a 55% stake in Worldpay, owned by Fidelity National Information Services Inc., earlier this year. That transaction values Worldpay at $18.5 billion.
Arrangers had invited both euro and dollar investors to a pre-marketing process for the debt offering prior to Tuesday’s launch. The financing is also expected to include high-yield bonds that have yet to be officially announced.
JPMorgan and GTCR declined to comment. Goldman and Fidelity Information Services didn’t respond to a request for comment.
Read more: Investors Sneak a Peek at $9.4 Billion of Worldpay Buyout Debt
The financing backing GTCR’s purchase is the largest since Wall Street agreed to lend $13 billion to help fund Elon Musk’s takeover of Twitter last year. A successful debt sale could help spur a rebound in mergers and acquisitions, potentially leading to more jumbo deals.
The $3.4 billion Worldpay loan is offered at 3.5 to 3.75 percentage points over the Secured Overnight Financing Rate, and a discounted price of 99 cents on the dollar, while the $1 billion-equivalent portion in euros is offered at 3.5 to 3.75 percentage points over a benchmark and a discounted price of 98.5 cents, the people said.
Other notable debt transactions currently being marketed include a $3.7 billion deal to support a private-equity consortium’s purchase of Syneos Health, and a $550 million loan to support Bain Capital Private Equity’s acquisition of Brazilian restaurant chain Fogo de Chão. More are expected to hit the market, including a roughly $1 billion deal to support KKR & Co.’s purchase of Simon and Schuster.
Providing buyout financing can be lucrative for Wall Street banks when successful and disastrous when markets turn. Multiple lenders have been hit hard after committing debt financing and being unable to sell it, eating into fees and even leading to losses.
Most recently, Bank of America Corp. and Citigroup Inc. sold $3.1 billion of high-yield bonds and a leveraged loan tied to Apollo Global Management Inc.’s buyout of autoparts manufacturer Tenneco Inc. at a discount. The bonds, which priced at 85 cents on the dollar, traded down after pricing.
–With assistance from Claire Ruckin, Jeannine Amodeo, Christopher DeReza and Allan Lopez.
(Updates to include comment lines from parties.)
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