TRLPC: Antares Capital shops $13.9B loan deal for sale to CPPIB

Tue Jul 21, 2015 4:25pm EDT
 
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By Jonathan Schwarzberg and Leela Parker Deo

NEW YORK, July 21 (Reuters) - Antares Capital is lining up a $13.9 billion financing package that backs General Electric Capital Corp's sale of the middle market sponsor finance platform to Canada Pension Plan Investment Board (CPPIB) and raises funds for future growth, sources said.

The package for the acquisition, which was announced on June 9, consists of a $1.2 billion term loan A and a $2 billion revolver as well as a $10.7 billion asset-based facility, the sources said.

Credit Suisse is leading the credit facilities. Syndication of the deal launches at a bank meeting on July 27. Lender commitments are due August 12.

Both the term loan A and the revolver will mature in five years. Pricing will be tied to a ratings-based grid. The term loan A will amortize at a rate of 5 percent during the first year, 7.5 percent the second year, 10 percent the third year and 12.5 percent in each of the last two years.

The credit facility will be governed by total net asset value and adjusted asset ratio tests.

CPPIB's $12 billion acquisition of Chicago-based Antares vaults Canada's largest pension fund into the top tier of U.S. middle market lenders and marks GE Capital's exit as the dominant player in that space. Antares provides financing to small and mid-sized private equity-backed companies.

Antares will operate as a standalone, independent business with its own capital base and will be governed by its own board of directors. The business will also retain the Antares brand and will remain under the helm of managing partners David Brackett and John Martin.

CPPIB is contributing $3.85 billion in cash toward the $12 billion purchase price, Thomson Reuters LPC reported on June 11. The remainder would be financed with debt provided by a group of global investment banks, Mark Jenkins, CPPIB's senior managing director and global head of private investments, told LPC in June.

General Electric Co announced plans to divest the majority of finance arm GE Capital's assets in April, including the Antares sponsor finance business and its U.S. commercial lending and leasing unit. (Editing By Lynn Adler and Jon Methven)