A group of banks kicked off a roughly $4.5 billion leveraged loan sale on Wednesday to help support the buyout of Citrix Systems Inc. in a closely-watched transaction that will reveal just how willing investors are to buy risky corporate debt.
The transaction includes a $4.05 billion loan and a $500 million-equivalent euro loan, according to people with knowledge of the matter, who asked not to be identified discussing a private transaction. A lender call for the 6.5-year loans will be held at 11:00 a.m. New York time on Thursday, the people said.
Banks have been struggling to offload $15 billion of debt commitments that they agreed to provide in January to help finance the buyout of the software company by Vista Equity Partners and Elliott Investment Management. Since then, the cost of borrowing has spiked well above the maximum interest rates the banks promised on the deal, leaving them on the hook for hundreds of millions of dollars in potential losses. Typically banks provide these types of temporary debt commitments for buyouts that are then meant to be sold to high-yield bond and leveraged loan investors.
Read more: BNN Bloomberg
