Banks, including JPMorgan Chase & Co. and Bank of America Corp., are beginning to sell $2.5 billion in debt to finance Long Lake Management Inc.'s $6.3 billion acquisition of American Express Global Business Travel. This package, which combines leveraged loans and high-yield bonds, is being marketed to investors, with JPMorgan specifically offering a $1.5 billion term loan B at a margin of 4 percentage points above the benchmark, priced at a discount of 99 cents on the dollar. The sale of this debt package began the week of June 15, adding to a recent increase in leveraged-buyout financings.
Simultaneously, a consortium of banks, including BNP Paribas SA, Goldman Sachs Group Inc., UBS Group AG, and Wells Fargo & Co., is preparing to sell $3.75 billion in debt. This capital is intended to support Stonepeak Partners' acquisition of a majority stake in BP Plc's Castrol division. This debt package is also expected to include both leveraged loans and high-yield bonds across euro and dollar markets, with sales anticipated to commence in the late first quarter or early second quarter.
Long Lake Management, a three-year-old company backed by General Catalyst Partners and Alpha Wave, is set to acquire Amex GBT for $9.50 per share, representing a 60% premium over its early May trading price. This deal is significant as Amex GBT is the world's largest corporate travel platform. The successful sale of these substantial debt packages, totaling $6.25 billion for both transactions, is seen as a crucial test for the current leveraged finance market, indicating whether major buyout deals are making a strong comeback. Investors will receive cash directly, while Long Lake assumes the debt and associated risks, with the deal still pending shareholder and regulatory approvals, expected to close in the second half of the year.
