Refinitiv’s $5.5 billion bonds, $8.75 billion loans appear headed for early execution on Friday

By Paul A. Harris

Portland, Ore., Sept. 11 – The massive $13.5 billion of institutional bond and loan debt backing the Refinitiv deal appears unlikely to remain in the market over the coming weekend, as previously expected, market sources say.

There is a high probability that both the bonds and the loans will be priced in Friday executions, according to a source who invests in both asset classes.

Loan investors have been expecting to have until 5 p.m. ET on Monday to turn in their commitments, according to the original timing, sources say.

And bond books have been expected to remain open into the early part of the Sept. 17 week.

Proceeds from the overall $14.25 billion of debt financing, which in addition to the term loan and bond tranches includes a $750 million revolver, will be used to help fund the acquisition of a 55% stake in Thomson Reuters’ Financial & Risk business, which will be renamed Refinitiv, by Blackstone, Canada Pension Plan Investment Board and GIC.

Bonds oversubscribed

Demand for the dollar-denominated tranches of the $5.5 billion equivalent of junk bonds is massive, sources say.

A $2 billion tranche of 7.5-year senior secured notes (B2/B/BB+) is playing to $4.1 billion of orders, the investor said on Tuesday morning.

Demand for the $1.8 billion of unsecured notes (Caa2/B-/B+) is $3.3 billion, the source added.

Talk on the dollar-denominated secured bonds is in the low 7% area, while talk on the dollar-denominated unsecured bonds is in the low 9% area.

That talk has not changed, according to the investor.

However, the source added, there is a buzz in the market that the issuer and the dealers may be mulling concessions on an aggressive covenant package.

Should covenant concessions materialize, look for price talk to move lower, the investor said, adding that pricing on the dollar-denominated secured paper could even fall below 7%, should concessions materialize.

There are also euro-denominated bond tranches: $1 billion equivalent euro-denominated 7.5-year senior secured notes (B2/B/BB+) with initial talk in the 5% area, and $700 million equivalent of euro-denominated eight-year senior unsecured notes Caa2/B-/B+) with initial talk in the 7% area.

Less demand for loans

Demand for the $8 billion of term loan debt in the Refitiv deal is nowhere near as substantial as demand for the bonds, a loan trader said Tuesday.

The book for the $5.5 billion seven-year covenant-light term loan B is at deal size, while that book for the $2.5 billion equivalent euro-denominated seven-year covenant-light term B has yet to reach deal size, the source said.

As with the bonds, talk on the loans remains unchanged at Libor plus 400 bps to 425 bps, with a 0% Libor floor, at 99 to 99.5 on the dollar-denominated loan, Euribor plus 425 bps, a 0% floor, at 99 to 99.5 on the euro-denominated loan.

It is the year's largest combination bank loan and bond financing, a market source said.

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