London Stock Exchange Group (LSEG) emerged victorious in the category for Loans above £750m in recognition of its achievements around the acquisition of Refinitiv Holdings Ltd. The acquisition, which chairman Don Robert has described as “a defining moment for LSEG”, is due to be completed in the second half of 2020, once regulatory approval processes have been completed.
Announced in August 2019, the $27bn all-share acquisition of Refinitiv includes $13.5bn of debt. The deal – LSEG’s largest to date – is intended to create a leading global financial markets infrastructure provider, diversified across geographies, asset classes and product offerings.
As a result of the acquisition, LSEG intends to enhance its existing customer offering by extending its trading capabilities and data content, management and distribution services.
To fund the acquisition, LSEG secured support from 18 banks in the form of a dual tranche bridge facility, with the proceeds available to refinance Refinitiv’s third-party debt upon completion. The facility comprised a $9.325bn term loan commitment and a €3.58bn term loan commitment, with a tenor of 12 months (with a further six-month extension at LSEG’s option) starting from the earlier of either the completion date or 18 months after signing.
The tenor was structured to offer flexibility around the length of the period required to receive anti-trust and financial regulatory approvals in the relevant jurisdictions. The availability period of nearly two years provides a good deal of flexibility on timings.
This landmark deal demonstrates LSEG’s ability to access a very large amount of bank financing within a short time frame in order to realise a major strategic goal. LSEG will continue to adapt and revise its own capital structure by tapping various debt instruments, spanning loan syndications and debt capital markets solutions, including a mix of commercial paper and medium-term-note maturities.
Among the notable features were an innovative pricing structure, which includes an initial flat margin for the earlier of either 12 months after signing or three months after completion linked to a commitment fee profile that sensibly manages costs ahead of completion of the acquisition. The scale of the exercise, the transformative nature of the acquisition and LSEG’s innovative approach to pricing were enough to convince the judges.
“LSEG’s acquisition funding for the Refinitiv acquisition was a transformative deal, making LSEG the clear winner in this category.”
Providers: Barclays, Goldman Sachs and Morgan Stanley acted as M&A advisers and were mandated as bookrunners and underwriters for the two facilities; 15 other international banks committed at a top-tier level during syndication (including all LSEG’s pre-existing bank lending groups)
Structure: Bridge facility comprising a $9.325bn tranche and a €3.58bn tranche
This article was taken from the October/November 2020 issue of The Treasurer magazine.
