Athenahealth Group Inc. is looking to raise $6.75 billion in debt in order to partially fund the largest deal that will hit the U.S. credit market this year.
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The loan financing consists of a $5.75 billion seven-year secured loan and a $1 billion delayed-draw term loan and will be used to fund the health information technology company's leveraged buyout by a group led by Hellman Friedman LLC and Bain Capital, according to people with knowledge of the matter. The loans are part of a $9.25 billion debt financing package that is expected to include $2.5 billion of unsecured junk bonds.
Before interest rates rises, the launch comes as borrowers rush to lock in low borrowing costs. The buyers, including Evergreen Coast Capital and Veritas Capital, are paying about $17 billion for Athenahealth, which helps doctors and hospitals collect money from health insurers and government for the services they provide. The deal is expected to close in the first quarter of 2022.
JPMorgan Chase Co. is leading the loan portion of the launch. A lender meeting will take place Wednesday at 3: 30 p.m. in New York. According to people familiar with the matter, Goldman Sachs Group Inc. is expected to lead the bond portion.
Leveraged loans are seeing strong investor demand, because they are pegged to floating-rate benchmarks and offer protection against the added volatility that comes with rising rates. Junk bonds have fixed coupons and are off to a tough start in 2022, on the other hand.
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