Refco to get new credit facility, sell bonds for Thomas H. Lee buyout

By Sara Rosenberg

New York, June 8 - Refco Group Ltd. LLC will be coming to market with a new credit facility and a high-yield bond offering to help fund Thomas H. Lee Partners' acquisition of a major ownership stake in the company, a market source said.

Bank of America, Credit Suisse First Boston and Deutsche Bank will be providing the financing for the transaction, according to a company news release, though who will be left lead on the deals was unclear prior to press time. Deutsche will be a bookrunner on the bonds and a joint lead arranger, joint bookrunner and documentation agent on the loan.

Financial terms of the deal were not disclosed; but, the transaction, which is subject to regulatory and other approvals, values the company at about $2.25 billion. As part of the agreement, Refco's management team will retain a significant ownership stake in the company.

"We chose Thomas H. Lee Partners as a partner because of its proven ability to work closely with management to implement growth strategies, its significant financial resources and its extensive experience in financial services," said Phillip R. Bennett, president and chief executive officer, in the release. "This transaction provides us with a leading financial partner that supports our vision for the company and our strategy of building on a strong foundation through internal growth and opportunistic acquisitions."

Credit Suisse First Boston was the sellside mergers and acquisitions adviser for Refco. Sandler O'Neill & Partners was the lead buyside M&A adviser for Thomas H. Lee, with Bank of America and Deutsche Bank as co-advisers.

Refco is a New York diversified financial services organization.

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