Refinitiv launches $8 billion buyout – the largest since the 2007-2009 financial crisis

Refinitiv is essentially Thomson Reuters’ F&R unit, which acquired a 55% majority stake by Blackstone on January 30 2018.

Thomson Reuters’ Financial and Risk (F&R) division – Refinitiv has has launched a price guidance on its term loan B, equivalent to $8 billion following a bank meeting yesterday morning.

The 7-year term loan B is made up of $5.5 billion and the balance loan amount which is equivalent to $2.5 billion, euro-denominated facility. Incidentally, the dollar loan is guided at 400 basis points to 425 basis points over Libor, while the euro loan is guided at 425bp over Euribor.

While the dollar tranche has no floor, the euro has a 0% floor. Both are offered at a 99-99.5 OID and have six months soft call protection at 101. Significantly, neither tranche has a financial covenant. The facility amortizes 1% a year.

Further, the leverage for the buyout is around 4.25 times secured and 5.25 times unsecured on an adjusted of $2.5 billion. This includes nearly $700 million in cost savings and synergies from the business’s reported Ebitda of $1.8 billion.

A follow up meeting is scheduled to take place in New York today with commitments due on September 17.

While BAML is the left lead on both Term Loan Bs, JP Morgan, Bank of America Merrill Lynch, Morgan Stanley, Citigroup, Goldman Sachs, Wells Fargo, HSBC, UBS, Deutsche Bank, Credit Suisse, Royal Bank of Canada, Barclays, and Sumitomo are the lenders.

The deal is set to be the largest buyout since the financial crisis of 2007-009; its launch has been eagerly awaited since the deal was underwritten in January.

Its Expected Corporate Family Ratings are B3/B/BB, while expected secured ratings are B2/B(RR 3)/BB+ (RR 2).

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