The $25 billion Dell buyout is being led by CEO and Founder Michael Dell and private equity firm Silver Lake Partners.
The euro loan, which will have a covenant-lite structure, will reduce the size of the $3.25 billion high yield bonds also backing the deal.
The bonds include a $2 billion tranche of first-lien seven-year non-call three bonds, on which initial price thoughts were heard in the high 5 percent area, and a $1.25 billion second-lien eight-year non-call three notes offering on which initial price thoughts were heard in the high 6 percent area.
The additional loan will reduce Dell’s overall cost of capital, one of the sources said.
Pricing on the euro loan is expected at 400 basis points over Euribor with a 1 percent floor and a 99 original issue discount, 25bp wider than the 6.5-year $4 billion dollar Term Loan B, which is guided at 375bp over Libor with a 1 percent Libor floor and a 99 original issue discount.
Credit Suisse, Barclays, Bank of America Lynch, RBC and UBS are leading the financing.
Commitments on the loan are expected on Monday, while the bonds are expected to price either later this week, or early next week.
A dinner with bond investors took place on Wednesday evening in New York, and meetings are scheduled for Baltimore and the West Coast on Thursday.
Claire Ruckin is a reporter for Reuters Loan Pricing Corp in London
Natalie Harrison is deputy credit head for IFR in New York