Wednesday, 24 April 2019

Refinitiv to cut short European bond roadshow

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  • Thomson Reuters

Refinitiv has cancelled the Amsterdam and Paris investor meetings for the bond component of its buyout financing, according to a source with knowledge of the matter.

The London roadshow has been confirmed.

Pricing for the US$5.5bn bond component of the US$13.5bn buyout financing, the largest since the financial crisis, was initially slated for September 18, but sources said the US dollar tranches are seeing good demand relative to the euros and that leads are considering accelerating the deal.

The roadshow started on September 5.

The deal includes US$2bn and US$1bn-equivalent euro-denominated 7.5NC3 senior secured first lien tranches, and US$1.8bn and US$700m-equivalent euro-denominated 8NC3 senior unsecured bonds. Initial price thoughts are low 7s, 5% area, low 9s, and 7% area respectively.

The US$8bn-equivalent loan financing has not been changed so far, said the source.

“The feedback we found was that the euro books are not at deal size and that leads were contemplating shifting some of the euros to dollars,” said a bond investor in London.

Investors said they were concerned about the company’s complicated business model with high adjustments, and that the deal documentation was aggressive.

“The covenants were so bad that it’s not even worth our time,” said a London-based fund manager.

The first investor said competition with Akzo Nobel’s €1.385bn bond is also having an impact. Akzo Nobel’s speciality chemical business is marketing the deal as part of the financing backing its takeover by Carlyle and Singaporean wealth fund GIC, which also includes €5bn in loans.

“I spoke to one of the leads the other day and asked if people are viewing these as one or the other. The answer was: yes,” the London-based investor said.

Thomson Reuters’ Financial and Risk business, which includes IFR, will be renamed Refinitiv following the close of the acquisition by Blackstone.

A total of 25 banks are involved in the deal, with JP Morgan as sole physical bookrunner and B&D for the bonds.

(Additional reporting by Max Bower and Natalie Harrison.)


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