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(Bloomberg) — A group of banks has slashed the pricing on $8.5 billion of leveraged loans to help fund the buyout of medical-device maker Hologic Inc., underscoring strong investor appetite for risk.
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The makeup of $12.25 billion of financing — one of the largest buyout packages expected to come to market this year — has been changed amid the price tightening on the leveraged loans.
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The dollar-denominated term loan B was increased by 40% to $7 billion, with price talk cut by one-half percentage point to 2.25 to 2.5 percentage points above benchmark, according to a person familiar with the matter. The loan is now being offered at 99.75 cents on the dollar, versus 99.5 cents previously, said the person, asking not to be named because discussions are private.
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Price talk was also tightened for the euro-denominated term loan B, the size of which was cut by 25% to the equivalent of $1.5 billion, the person added. That loan is now being offered at par.
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Lender commitments for the dollar and euro loans are due at 10:30 a.m. New York time, the person added.
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Blackstone Inc. and TPG Inc. agreed in October to buy Hologic for as much as $18.3 billion, including debt. Banks including Citigroup Inc., Bank of America Corp. and Barclays Plc committed at that time to provide $12.25 billion of debt financing. Canada’s PSP Investments, Oaktree Capital Management, Franklin Templeton and other private lenders snapped up the subordinated debt that banks had committed to.
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