The fact that? Boots has increased the size of its term loan called to US $ 1 billion in dollars, while further reduce the general size or its bond emission to finance its acquisition by Sycamore Partners.
The details The debt package that supports the purchase now leans more on loans, with the Boots Total Term Loan package that reaches US $ 3 billion equivalent, above the original of US $ 2.25 billion. The bond component has been reduced to 1.25 billion euros equivalent, divided between euros and sterling, with the section of bonds in dollars completely discarded.
Investor demand seems strong, with the three sections of loans to adjust the price guide. Updated terms include:
- USD loan: 350–375 bp on Sofr (below 375–400)
- Euro loan: 350–375 bp on Euribor (below 375–400)
- Sterling loan: 475–500 BPS on Sonia (below 500)
Both loans and bonds are seven years old, but the term loans offers a soft call function after six months, giving flexibility to refinance boots before the bonds, which cannot be used for three years. JPMORGAN leads the term loan syndication, while Goldman Sachs is running the bond offer.
Why? The change in financing reflects the demand for loans for leverage of investors, which have surpassed bonds in the last week in the middle of a buoyant market. The structure also sacrifices more refinancing flexibility, aligning with the emitter preferences in an environment of strict prices and active capital markets.
Fountain: Bloomberg
