BANK of America has committed to financing a US$1.83 billion leveraged loan for Lone Star Funds’ purchase of Carrier Global’s commercial and residential fire unit, according to sources familiar with the matter who asked not to be identified as the information is private.
The proposed buyout, announced two weeks ago and expected to close by year-end, is worth US$3 billion on an enterprise value basis.
A representative for Bank of America declined to comment, while Carrier Global and Lone Star Funds did not respond to requests for comment.
Acquisition financings involving lower-rated companies are expected to increase in the next few months. For leveraged loans, M&A made up 7 per cent of this year’s volume as at mid-August, down from 9 per cent a year earlier, according to data compiled by Bloomberg.
Activity remains strong among collateralized loan obligations, the largest buyer of leveraged loans sold to institutional investors. That group has been yearning for new-money deals as repricings and refinancings dominated the market. Issuance of new CLOs has surged 70 per cent this year. BLOOMBERG
