Antares Capital is working with banks on arranging $13.9 billion worth of senior secured credit facilities to finance its sale to the Canada Pension Plan Investment Board (CPPIB), it has been reported.
Antares declined to comment on the deal which would include a $10.7 billion asset-backed loan that several banks are already rumoured to be syndicating, according to Reuters.
The financing would be backed by Antares’ portfolio of term loans and revolving credits to American mid-market companies. It should also help drive the lender’s future growth, Reuters reported.
The ABL facility includes a $3 billion asset-backed revolving credit facility and a $7.7 billion asset-backed term loan. The asset-backed revolver pays 225 basis points over Libor when drawn and 50 basis points if undrawn. The $7.7 billion term loan pays 225bps over Libor. The structure of the deal would be similar to that of a warehouse facility used to structure and gather assets for CLOs.
Credit Suisse, Deutsche Bank and Citigroup are said to be syndicating the deal and seeking investment grade lenders given Antares’ BBB rating from Fitch. Sumitomo Mitsui Banking Corp and Scotiabank have also signed up as co-arrangers and co-documentation agents, sources told Reuters. The financing was launched on 27 July, with proposals due by 12 August.
CPPIB announced in early June that it would be buying the Antares unit, the lending arm of GE Capital that works exclusively on sponsor-backed mid-market transactions, for $12 billion. General Electric said in April that it would selling off most of its lending business.