Athenahealth Is Raising $6.75 Billion in Loans to Pay for LBO

(Bloomberg) -- Athenahealth Group Inc. is looking to raise $6.75 billion in debt to partially fund the largest deal to hit the U.S. credit market this year.

The loan financing, which consists of a $5.75 billion seven-year leveraged loan and a $1 billion delayed-draw term loan, will be used to fund the health information technology company’s leveraged buyout by a group led by Hellman & Friedman LLC and Bain Capital, according to people with knowledge of the matter. The loans are part of a a $9.25 billion debt financing package that is also expected to include $2.5 billion of unsecured junk bonds.

The launch comes as borrowers rush to lock in low borrowing costs before interest rates rise. The buyers, who also include Veritas Capital and Evergreen Coast Capital, are paying about $17 billion for Athenahealth, which helps doctors and hospitals collect money from health insurers and the government for the services they provide. The deal is expected to close in the first quarter of 2022.

JPMorgan Chase & Co. is leading the loan portion of the launch. A lender meeting will take place at 3:30 p.m. Wednesday in New York. Goldman Sachs Group Inc. is expected to lead the bond portion, according to people familiar with the matter.

Leveraged loans are seeing strong investor demand, partly because they’re pegged to floating-rate benchmarks and offer protection against the added volatility that often comes with rising rates. Junk bonds, on the other hand, have fixed coupons and are off to a tough start in 2022. 

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