(Bloomberg) -- Bank of America Corp. is leading a $1.83 billion leveraged loan for Lone Star Funds’ purchase of Carrier Global Corp.’s commercial and residential fire unit, according to people 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 $3 billion on an enterprise value basis.
A representative for Bank of America declined to comment, while Carrier Global and Lone Star Funds didn’t respond to requests for comment.
Acquisition financings involving lower-rated companies are expected to increase the next few months. For leveraged loans, M&A made up 7% of this year’s volume as of mid-August, down from 9% 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% this year.
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