(Bloomberg) -- Morrisons is refinancing £1.2 billion ($1.6 billion) in leveraged loans as the UK grocer looks to take advantage of stronger investor demand for higher-yielding debt.
Goldman Sachs Group Inc. and HSBC Holdings Plc will begin marketing a potential deal from Tuesday, according to a person familiar with the matter. The transaction would be split between a euro-denominated term loan B and a sterling term loan B, said the person, who asked not to be identified because the matter is private.
The company’s outstanding debt includes a €1.3 billion ($1.4 billion) term loan B, a €710 million ($776 million) term-loan B2 and a £500 million ($653 million) term loan B, which all mature in 2027. A deal would extend the maturities by a further three years, said the person.
The group would also use cash resources to partially repay the loan facilities, said the person.
Morrisons is coming to the market more than two years after banks had to sell down chunks of the more than £6 billion in financing that backed Clayton Dubilier & Rice LLC’s buyout of the group to investors at a discount due to deteriorating debt conditions. In recent weeks, the latest cycle of interest-rate cuts has seen a number of opportunistic deals as investors look to pick up riskier, higher-yielding debt.
The commitment deadline for the refinancing is Oct. 24, said the person.
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