The euro portion will be welcomed by European loan investors eager to invest in one of the biggest leveraged loan financings so far this year, the bankers said.
Dell’s $5.5 billion issuance is the second-largest institutional LBO loan this year, behind Heinz’s $9.5 billion institutional issuance backing Heinz’s $28 billion buyout by Berkshire Hathaway and 3G Capital, according to Thomson Reuters LPC data.
As much as 500 million euros could be carved-out of the $4 billion, 6.5 year term loan B, which will be offered at the same pricing guidance as the dollar TLB of 375 bps, with a 1 percent floor and 99 original issue discount (OID), the bankers said.
Commitments are due from European investors by September 23, the same deadline for the rest of the term loans.
As previously reported, the financing also includes a $1.5 billion, five-year TLC guided to pay between 275-300 bps, with a 1 percent Libor floor and a 99.5 OID, a $2 billion, five-year asset-based revolving credit facility. There is also $2 billion in first-lien seven-year secured notes and $1.25 billion in second-lien eight-year secured notes.
Bank of America Merrill Lynch, RBC, Barclays, Credit Suisse, and UBS are lead arrangers on the deal.
The banks declined to comment.
The financing package will also include an up to $2 billion 7.25 percent ten-year subordinated note issuance from Microsoft, and roughly $7.7 billion in existing cash on Dell’s balance sheet.
($1 = 0.7491 euros)
Claire Ruckin is a reporter for RLPC in London