Banks are gearing up to issue approximately $7.9bn in debt to provide financing for Clayton Dubilier & Rice’s (CD&R) proposed takeover of packaging company Sealed Air Corp, reported Bloomberg.
The transaction is expected to happen this month.
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A consortium including JPMorgan Chase and Wells Fargo is preparing a high-yield bond issue expected to offer yields between 7% and 7.25%.
In addition to the bonds, about $4.5bn in leveraged loans split between US dollars and euros is slated to be part of the financing package, according to an earlier report by Bloomberg.
Other financial institutions involved in the syndicate are BNP Paribas, Goldman Sachs Group, and UBS Group.
These banks have begun preliminary discussions with investors to determine interest in the proposed debt package, sources said.
The loans could be set at a margin of roughly three percentage points over the Secured Overnight Financing Rate.
Details of the financing are still being finalised and may change, according to those close to the deal.
Funds affiliated with CD&R agreed last November to purchase Sealed Air, best known for inventing Bubble Wrap.
The deal carries an enterprise value of $10.3bn and is anticipated to be completed by mid-2026.
Once concluded, Sealed Air will operate as a private entity, remain based in Charlotte, North Carolina, and will no longer be listed on the New York Stock Exchange.
Other institutions providing buyout financing commitments include Mizuho Financial Group, Citigroup, and Royal Bank of Canada.
Representatives from CD&R, Sealed Air, and all participating banks declined to comment or did not respond to requests for statements.
