Investors to Sneak a Peek at Largest Buyout Debt Since Twitter

Investors are getting a preview of the $9.4 billion jumbo financing package behind the buyout of Worldpay Inc. as banks including JPMorgan Chase & Co. and Goldman Sachs Group Inc. drum up appetite before the official sale of the debt.

(Bloomberg) — Investors are getting a preview of the $9.4 billion jumbo financing package behind the buyout of Worldpay Inc. as banks including JPMorgan Chase & Co. and Goldman Sachs Group Inc. drum up appetite before the official sale of the debt.

Arrangers have invited both euro and dollar investors to a pre-marketing process prior to the sale next week, though a good response could accelerate the timing, according to people familiar with the matter, who asked not to be identified because the talks are private. The most hotly-anticipated deal in the market this year includes $8.4 billion of funded leveraged loans and high-yield bonds. The rest will be a $1 billion revolving credit facility.

The financing backing GTCR’s purchase of a majority stake in Worldpay 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.

JPMorgan is targeting dollar investors with around $6.4 billion of the Worldpay debt, while Goldman is marketing a portion equivalent to about $2 billion for euro investors, the people said. A chunk of the Goldman-led debt could also be offered to investors focusing on sterling-denominated assets, they said.

The debt may be split evenly between loans and bonds, but the final share could change as the arranging banks — which also include Citigroup Inc., Wells Fargo & Co., Deutsche Bank AG and UBS Group AG — play the different markets off each other in a bid to get the best deal for the borrower, the people said. Pricing for the loans is expected to range from the high 300 basis points to the low 400s over the benchmark, with an upfront discount of around 200 basis points, the people said.

Spokespeople for Goldman, JPMorgan, GTCR, Citi and UBS declined to comment. Spokespeople for Wells Fargo, and Deutsche Bank didn’t immediately respond to a request for comment.

Syneos Deal

Also coming to market is a $3.7 billion debt package backing the buyout of Syneos Health, overseen by a consortium led by Elliott Investment Management, Patient Square Capital and Veritas Capital.

Though potentially a harder sell than Worldpay, which is well-known and has prominent financial and corporate sponsors, banks also held a pre-marketing process for Syneos and the deal is being viewed as a bellwether for investor appetite for single-B rated names.

Spokespeople for Patient Square and Elliott declined to comment, while Veritas didn’t immediately respond to a request for comment.

The M&A pipeline is growing as the fourth quarter nears, ending a drought for new deals since last year. Then, banks struggled with billions in commitments on their balance sheets as investors steered clear of riskier assets and buyers and sellers wrestled to agree valuations amid rising interest rates and soaring inflation.

With markets calmer and banks having cleared much of their hung debt, deals are starting to emerge.

Read More: Wall Street’s Lucrative Leveraged-Debt Machine Is Breaking Down

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