Bankers Boost Size of Worldpay Buyout Debt on Investor Demand

Eleanor Duncan and Michael Tobin, Bloomberg News

A waitress tears a receipt from a Worldpay Inc. payment terminal at a restaurant in this arranged photograph in London, U.K., on Monday, March 18, 2019. Fidelity National Information Services Inc. agreed to acquire Worldpay Inc. for about $34 billion in cash and stock, the biggest deal ever in the booming international payments sector. , Bloomberg

(Bloomberg) -- Banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. sold $8.64 billion of debt to fund the partial leveraged buyout of Worldpay Inc., boosting the size of the offering in a sign of growing investor demand for LBO debt.

The size of the debt sale was boosted by $250 million, allowing private equity firm GTCR to cut the equity it’s using to buy a majority stake in the payment processor. The bond and loan sale was the biggest LBO financing since banks helped fund Elon Musk’s takeover of Twitter last year.

Investors have been piling into high yield debt offerings in September after markets were quiet for much of the previous few months. The combined Worldpay debt offerings drew about $20 billion of orders, according to people with knowledge of the transactions. Representatives from Goldman Sachs and JPMorgan declined to comment on order books.

“Jumbo deals are now back on the agenda,” said Rahul Mistry, a managing director in the EMEA leveraged finance group at Goldman Sachs. “It has to be the right credit and sector, but the depth of demand is now there.”

LBO debt that seemed unsellable just a few months ago is finding buyers. And debt sales are getting bigger too. Last week, Restaurant Brands International Inc., owner of the Burger King and Popeye’s Louisiana Kitchen fast food chains, sold the largest leveraged loan since early 2022, a $5.175 billion offering, to refinance debt maturing in 2026.

Boosting Twice

Demand for Worldpay debt allowed JPMorgan, which was targeting US dollar investors, to twice boost the size of a term loan to $5.2 billion, from an initial $3 billion. It landed at 3 percentage points over the Secured Overnight Financing Rate, and a discounted price of 99.5 cents on the dollar.

The €500 million ($534.3 million) euro-denominated portion was sold at 3.25 percentage points over a benchmark and a discounted price of 99.5 cents. The offering size was cut from an originally planned €1 billion, and was led by Goldman.

The borrower will end up paying less interest for both the dollar and euro term loans, compared with levels discussed earlier in the sales process.

The size of the US dollar-denominated bond sale was increased to $2.175 billion from $2 billion. Those bonds were sold at par with a 7.5% coupon.

Meanwhile, the Goldman Sachs-led sterling bonds were cut to £600 million ($742.7 million), down from £700 million, and priced at par with a 8.5% coupon. The deal wasn’t originally underwritten with a sterling component, but investors asked for one, according to a person with knowledge of the deal.

Worldpay is a unit of Fidelity National Information Services Inc. that processes card payments for businesses.

--With assistance from Claire Ruckin.

(Corrects total deal size in first paragraph.)