(Bloomberg) — A group of debt arrangers led by Morgan Stanley and JPMorgan Chase & Co. priced $6.1 billion in high-yield bonds and leveraged loans to support Stone Point Capital and Clayton Dubilier & Rice’s acquisition of Truist Financial Corp.’s insurance business.
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The group sold $3 billion in bonds Friday concurrently with a $3.1 billion first-lien loan, which was downsized by $250 million in favor of the bonds, according to a person familiar with the matter who asked not to be identified because the information is private. Morgan Stanley led the bonds while JPMorgan led the leveraged loan.
The notes priced at par with a 7.125% coupon, slightly tighter than initial pricing discussions of 7.25%. The loan priced 325 basis points over the Secured Overnight Financing Rate at a discount of 99.75 cents, another person said.
Friday’s bond and loan sale is the final piece of financing that will support the acquisition, and the notes were offered on a quick timeline. An investor call was held Friday morning and the notes priced Friday afternoon.
The more than 20 firms managing the bond sale received more than $3 billion of orders before launching the deal on Thursday afternoon, the person added. Bookrunners on the transaction include the capital markets desks of private equity firms including Stone Point, KKR & Co. and Apollo Global Management Inc.
Representatives for Morgan Stanley and JPMorgan declined to comment. Representatives for Truist, Stone Point and CD&R didn’t respond to requests for comment.
The sales are part of a financing package for the $15.5 billion deal that includes a rare $1.9 billion second-lien loan — one of the largest ever for a buyout — that was sold earlier in March.
The latest financing comes as risk premiums on high-yield bonds are at their lowest in more than two years. The average spread on junk bonds on Thursday was 292 basis points, according to data complied by Bloomberg.
–With assistance from Jeannine Amodeo.
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