Platinum Equity is poised to headline a robust calendar next week with a $4 billion acquisition financing package. The private equity firm’s bond-and-loan deal comes as leveraged buyout funding activity picks up in both markets. The company is offering $2 billion in secured high-yield notes and a leveraged loan of the same amount to help fund the purchase of technology distribution firm Ingram Micro Inc.
Early pricing discussions on the bond are for a yield in the high 4% range. Now that investors have expanded their appetites for risk in search of higher-yielding assets, debt-funded acquisitions are hitting the market at a faster pace after a pause through much of 2020.
Bankers for Apollo Global Management have also started pitching a $4.1 billion debt sale comprised of bonds and loans that will finance its take-private deal for Michaels Cos. Credit Suisse Group AG and Barclays Plc are sounding out buyers for a $2.1 billion term loan alongside $700 million of secured and $1.3 billion of unsecured notes. Official marketing is expected to kick off as soon as this week, according to people with knowledge of the matter.
Low funding costs are likely to tempt even more borrowers to sell junk bonds, especially before rates rise further. Issuance hit a quarterly record this week with yields near all-time lows and spreads hovering around pre-pandemic levels. Cruise operator Royal Caribbean Cruises Ltd. returned to raise $1.5 billion of unsecured notes. Meanwhile, chicken producer Pilgrim’s Pride Corp. sold $1 billion of debt tied to environmental targets, the largest ever for the genre in the U.S. junk bond market.
Source: BNN Bloomberg
By Caleb Mutua
