(Bloomberg) -- Banks are starting to sound out investors for a financing that will pay for Roark Capital Group’s leveraged buyout of sandwich chain Subway in a bond deal that could be among the largest of its kind, according to people with knowledge of the matter.

Subway has asked Morgan Stanley and Barclays Plc to put together the debt package in the form of a whole business securitization, a type of borrowing in which a company effectively pledges most of its assets in exchange for cheaper financing, they said, declining to be identified as the details are private. 

The banks are arranging in-person events in Boston, New York and Los Angeles starting May 8 to pitch the deal to potential buyers, they added. Subway CEO, John Chidsey, and Subway CFO, Jeff Shepherd, are expected to attend the events.

In August, Bloomberg reported that Roark may borrow nearly $5 billion in total, which would be among the largest whole business securitizations on record — although the banks may decide to bring it to the market in several pieces. The banks may choose to tap the market as soon as late this month, a separate person said, without specifying the size. 

Barclays declined to comment. Representatives for Morgan Stanley, Subway and Roark didn’t immediately respond to requests for comment.

Roark won the race to acquire the US sandwich chain in August, after fending off a late challenge from a rival bid group led by TDR Capital and Sycamore Partners. A group of seven banks that month agreed to provide $4.9 billion of temporary financing that was expected to be converted into one of the largest whole-business securitization deals ever. The acquisition closed on April 30, according to a statement.

Whole-business securitizations require a company to effectively mortgage most of its assets — such as royalties, fees and intellectual property — to obtain financing. The structure has become popular among high-risk borrowers with large franchises, as it allows them to raise debt more cheaply compared to traditional bonds and loans. Arby’s Restaurant Group Inc., Wendy’s Co. and Dunkin’ Brands Group Inc. have all tapped this market over the last few years. 

The seven banks that have committed financing for the Subway acquisition are Morgan Stanley, Barclays Plc, JPMorgan Chase & Co., Mizuho Financial Group Inc., MUFG, Rabobank and Wells Fargo & Co., as reported by Bloomberg.

Roark is an Atlanta-based private equity firm with $38 billion in equity under management. It focuses on consumer and business service companies, with a specialization in franchise and multi-location businesses in the retail, restaurant, consumer and business services sectors, according to the April 30 statement.

--With assistance from Charles Williams.

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