JPMorgan Chase & Co. is leading a push by Wall Street banks to offload risky loans for acquisitions. The latest is a $2 billion debt sale to finance the purchase of asset manager Janus Henderson Group Plc by Nelson Peltz’s Trian Fund Management and General Catalyst.
The bank will kick off a call Tuesday to drum up demand for the deal. JPMorgan, which is leading four US dollar leveraged buyout or acquisition loans in total this week, is also hosting a meeting for the long-awaited cross-border $5.75 billion offering for video game maker Electronic Arts Inc. that has already attracted strong interest.
US leveraged loan prices have come under pressure in recent weeks amid worries about how artificial intelligence will impact software companies’ earnings, the escalation of the war in Iran and as cracks emerge in the private credit market.
They’ve recovered slightly though, rising to about 95 cents on the dollar as of Monday according to Bloomberg-compiled data, cranking open a window to sell the debt that was underwritten by banks months ago when market conditions were more stable.
Trian and General Catalyst agreed to buy Janus Henderson in December, in a deal that valued the asset manager at about $7.4 billion. Trian already owned 20.6% of Janus Henderson’s shares and has been represented on the board since 2022.
A lender call for the loan offering, which will be sold by a unit called Jupiter Borrower Inc., will kick off at 10 a.m. New York time, according to a person with knowledge of the matter, who asked not to be identified discussing a private transaction.
The financing for acquisition, which will also refinance debt, will include $600 million of other secured debt, $1 billion of convertible preferred and $3.6 billion of common equity, the person said. Pricing discussions on the loan are 2.75 percentage points over the Secured Overnight Financing Rate with a discounted price of 98.5 to 99.0 cents on the dollar. Commitments are due March 26.
JPMorgan held lender calls Monday for two other LBO financings: one for Select Medical Corp. and another for mining equipment supplier Molycop Ltd. Banks are also preparing a roughly $7.15 billion debt offering to help finance Clayton Dubilier & Rice’s buyout of packaging company Sealed Air Corp., which may come to market as soon as this week.
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