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Reuters: Dell Launches $5.5B Loan to Back Leveraged Buyout

September 12, 2013, 08:02 AM
Filed Under: Technology

Computer maker Dell Inc set indicative pricing on the new $5.5 billion loan backing the company's approximately $25 billion buyout by founder and CEO Michael Dell and private equity firm Silver Lake Partners, sources told Thomson Reuters LPC.

The new deal will include a $1.5 billion, five-year term loan C and a $4 billion, 6.5-year term loan B. The term loans are expected to be covenant-lite.

The term loan C is guided at LIB+275-300, with a 1 percent Libor floor and a 99.5 original issue discount. The term loan B is guided at LIB+375, with a 1 percent Libor floor at 99.

The debt financing package also will include a $2 billion, five-year asset-based revolving credit facility, $2 billion in first-lien seven-year secured notes and $1.25 billion in second-lien eight-year secured notes.

About $750 million of the ABL facility is expected to be drawn at the close of the transaction.

Bank of America Merrill Lynch, RBC, Barclays, Credit Suisse and UBS are lead arrangers on the term loans and the ABL revolver. Term loan commitments are due September 23, and closing and funding is expected in late October.

View the entire Reuters story.

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