ThyssenKrupp Elevator Buyout Seeks Additional $4.6 Billion Debt

Bankers have launched the remaining part of the jumbo debt sale backing the acquisition of ThyssenKrupp AG’s elevator unit, Europe’s largest leveraged buyout in a decade.

The new 4.05 billion euro ($4.6 billion) bond offering, denominated in euros and U.S. dollars, comes in addition to a proposed cross-border 3.05 billion euro loan issued on Monday to finance the acquisition, according to people familiar with the matter who asked not to be identified because they’re not authorized to speak about it.

Lead underwriters for the bond are Barclays Plc, Credit Suisse Group AG, and Goldman Sachs Group Inc. Deutsche Bank AG, Royal Bank of Canada, UBS Group AG are also involved.

The latest issue comprises the equivalent of 3 billion euros in senior-secured bonds, in addition to 1.05 billion euros in unsecured notes. Between loans and bonds, that brings the total debt being syndicated to 7.1 billion euros, making it one of the largest offerings in the European leveraged-finance market this year.

Bankers have been rushing to bring M&A-related financings to market to clear a pipeline of deals that got stuck on their balance sheets when the coronavirus pandemic struck Europe in March. High-yield bonds and leveraged loans on both sides of the Atlantic have now erased most of their losses since March, encouraging borrowers to return to the market.

July Closing

The financing helps fund the 17.2 billion-euro acquisition of ThyssenKrupp’s elevator unit by Advent International Corp. and Cinven Ltd., together with RAG-Stiftung. The purchase is due to close by the end of July.

The total financing includes a term loan A worth the equivalent of 500 million euros to be placed with banks, 2 billion euros in unfunded facilities and a 2 billion-euro payment-in-kind note, according to a bond document seen by Bloomberg.

Moody’s Investors Service assigned a B2 corporate rating for ThyssenKrupp elevator unit and a B1 rating to the senior secured debt, four notches below investment grade.

An investor call on the bond offering will take place on Wednesday and the global roadshow will continue until July 1.

©2020 Bloomberg L.P.

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