As PE giant Hellman & Friedman prepares to acquire MultiPlan from the investment firm run by Maurice "Hank" Greenberg (pictured) for roughly $7.5 billion, investment bankers at Barclays (BCS) are preparing to roll out a $3.27 billion megaloan to investors on Monday, a source close to the deal told Real Money.
The seven-year loan will also include a $100 million revolving credit facility (essentially a corporate credit card) and will be "covenant-lite," meaning it will lack traditional lender-friendly protections limiting the borrower's debt incurrance and leverage, the person said, who spoke on the condition of anonymity because deal terms are private.
Barclays has an investor conference slated for Monday; Goldman Sachs (GS) will be a secondary bookrunner on the loan package.
Hellman's $7.5 billion purchase of healthcare claims manager MultiPlan, which was announced earlier this month, and comes after Starr -- the investment firm run by Greenberg, the former CEO of AIG (AIG) -- executed significant expansion at the private company. Starr acquired MultiPlan from two private equitry firms in 2014 for $4.4 billion.
"Our partnership with MultiPlan, the culmination of a multi-decade relationship, has been a period of innovation highlighted by the continued development of its technology-enabled solutions allowing the company to expand into new markets and drive unprecedented growth," Geoffrey Clark, a senior managing director at Starr, said in a statement.
The new debt is expected to be one of the largest offerings so far this year of so-called leveraged loans, or those with ratings below Baa3 and BBB- by Moody's and Standard & Poors, respectively. MultiPlan's current $2.2 billion loan tranche, which was issued in 2014, is rated four notches below investment grade by Moody's and three notches by S&P.