(Bloomberg) -- Barclays Plc and Deutsche Bank AG are lining up a roughly $3.5 billion debt sale that will help fund Brookfield Business Partners LP’s acquisition of Scientific Games Corp.’s global lottery services and technology business, according to people with knowledge of the matter.
The financing is expected to comprise of $2.5 billion in leveraged loans that will be denominated in dollars and euros, the people said. The remainder will be in junk bonds, they added.
Timing is yet to be finalized but the debt offering may be launched as soon as late January, according to one of the people. Barclays will lead the bond portion of the sale, and Deutsche Bank the loans, the people said.
Representatives for both banks and Brookfield Business Partners declined to comment.
The entire acquisition is valued at about $5.8 billion, and Brookfield Business Partners is contributing about $2.6 billion of equity, according to a news release. The deal is expected to close in the second quarter of 2022.
Bond and leveraged loan issuance topped the $1 trillion milestone last month, a record for a calendar year, according to data compiled by S&P Global’s Leveraged Commentary & Data. Much of that unprecedented debt binge has been driven by acquisition and buyout financings, with a year-end burst of activity hitting the leveraged loan market this week.
Read more: Leveraged Loan Market Mocks Risk-Off Worries With Year-End Surge
M&A activity is also likely to continue to drive issuance next year, with some other large financings already on the radar for 2022, including a roughly $10 billion debt deal to help fund Hellman & Friedman LLC and Bain Capital’s leveraged buyout of health information technology company Athenahealth Inc.
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