(Bloomberg) -- A $1.4 billion leveraged-loan package priced Wednesday to help fund KKR & Co.’s buyout of money manager Janney Montgomery Scott, after terms on the deal were tightened.
Margin for the two-tranche deal is 3.25 percentage points over the Secured Overnight Financing Rate, issued at 99.5 cents on the dollar, according to a person familiar with the matter who asked not to be identified because the information is private. The margin can be reduced as much as a 0.75 percentage point if certain conditions are met. Also, investor-friendly protections were added.
The transaction emerged before Labor Day, making it the first of an expected bevy of acquisition-related financings for buyouts agreed to earlier this year. KKR cinched a deal in July to buy Janney, adding it would operate independently under the private equity heavyweight. The purchase is set to close by year’s end.
It’s one of several buyouts that the private equity firm is in the process of completing. They include Instructure Holdings Inc., whose buyout financing is also in the leveraged-loan market. Commitments for that $2 billion package were also due Wednesday.
More than $60 billion of loan launches have occurred since Labor Day, according to data compiled by Bloomberg, including an uptick of acquisition-related deals after making up less than 10% of deal volume this year. Just $28 billion of leveraged loans priced in August amid the global market tumult that occurred early in the month, the least since July 2023 and the first year-over-year decline in 16 months.
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