Related News:
Citigroup Sets Bank Meeting on Tomkins Buyout by Canada Pension Plan, Onex
Citigroup Inc. will meet with potential investors next week to discuss the financing for the acquisition of Tomkins Plc, according to a person familiar with the transaction, as new merger and acquisition transactions keeps the primary-debt calendar busy.
Canada Pension Plan Investment Board and Onex Corp. have agreed to buy London-based Tomkins, a maker of auto parts and building materials, for 2.89 billion pounds ($4.5 billion), according to a July 27 statement. They will fund the acquisition with $3 billion of underwritten debt.
In addition to the Tomkins deal, Valeant Pharmaceuticals International is seeking $3.02 billion in loans to merge with Biovail Corp. and Reynolds Group Holdings Ltd. may use as much as $5 billion in debt to purchase Pactiv Corp. The number of buyouts in the U.S. so far this year has increased 41 percent to 2,962 from 2,104 during the same period in 2009, according to data compiled by Bloomberg.
“Deal activity has definitely picked up,” said Sachin Shah, a special situations and merger arbitrage strategist at Capstone Global Markets LLC in New York. “You have a voracious appetite for deals being announced and the commitments are in place and banks are willing to lend.”
The Standard & Poor’s/LSTA U.S. Leveraged Loan 100 Index, which tracks the 100 largest dollar-denominated first-lien leveraged loans, rose to 89.51 cents on the dollar yesterday, down from 92.9 cents on April 26. Prices are up 51 percent from Dec. 17, 2008, when the index closed at 59.2 cents.
Leveraged-Loan Issuance
About $218 billion of leveraged loans have been arranged in the U.S. so far this year, Bloomberg data show, up from about $86 billion during the same period last year.
Citigroup will meet with potential investors of the loans to finance the Tomkins acquisition on Sept. 8 at 10 a.m. New York time, said the person, who declined to be identified because the talks are private.
Bank of America Merrill Lynch, Citigroup, Barclays Capital, RBC Capital Markets and UBS AG underwrote the debt, according to the statement.
Citigroup is the lead arranger on the loan portion of the financing and Bank of America is the lead for the bonds, according to the person.
Valeant Pharmaceuticals is seeking $3.02 billion of loans to finance its merger with Biovail and to pay a one-time dividend to shareholders, according to a June 23 regulatory filing.
Valeant Acquisition
Goldman Sachs Group Inc., Morgan Stanley and Jefferies Group Inc. agreed to arrange a $500 million term loan A, as much as a $2.27 billion term loan B and a $250 million revolving credit line, according to the filing.
The interest rate on the 4.5-year revolver and 5-year term loan A will be 4.5 percentage points more than the London interbank offered rate, according to the filing. The six-year term loan B will have a 4.75 margin over Libor, the rate banks charge to lend to each other, as well as a 1.75 percent floor on the lending benchmark.
A term loan A is sold mostly to banks, while a term loan B is sold to investors such as collateralized loan obligations, mutual funds and hedge funds.
To contact the reporter on this story: Richard Bravo in New York at rbravo5@bloomberg.net.
Rate These Stories
Rate this Page