Emerson Buyout Financing
Royal Bank of Canada (RBC) is leading a group of banks in the sale of a $2.75 billion loan to finance the buyout of Emerson Electric Co. The loan is being offered to investors in the form of a term loan B, which is a type of debt instrument used to finance leveraged buyouts.
Emerson Electric Co. is a global technology and engineering company that provides solutions to customers in the industrial, commercial, and residential markets. The company has a long history of innovation and is a leader in the automation and control industry.
The Buyout
The buyout of Emerson Electric Co. is being led by private equity firm Advent International. The deal is valued at $29 billion and is expected to close in the second quarter of 2023. The loan is being offered to investors in the form of a term loan B, which is a type of debt instrument used to finance leveraged buyouts.
The loan is being offered at a discount to par, meaning that investors will receive a lower interest rate than the face value of the loan. The loan is expected to have a maturity of five years and will be secured by the assets of Emerson Electric Co.
RBC’s Role
RBC is leading the group of banks in the sale of the loan. The other banks involved in the sale are Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley. The loan is being offered to investors in the form of a term loan B, which is a type of debt instrument used to finance leveraged buyouts.
RBC is also providing a $1.5 billion bridge loan to finance the buyout. The bridge loan is expected to be repaid with proceeds from the sale of the term loan B. The bridge loan is expected to have a maturity of three years and will be secured by the assets of Emerson Electric Co.
Investor Interest
The loan is expected to be oversubscribed, meaning that there is more investor demand than the amount of the loan being offered. The loan is being offered at a discount to par, meaning that investors will receive a lower interest rate than the face value of the loan.
The loan is expected to be attractive to investors due to the strong credit profile of Emerson Electric Co. and the fact that the loan is secured by the assets of the company. The loan is also expected to be attractive to investors due to the fact that it is being offered at a discount to par.
Risk Factors
The loan is not without risk. The loan is being offered at a discount to par, meaning that investors will receive a lower interest rate than the face value of the loan. This means that investors may not receive the full amount of their principal back if the loan is not repaid in full.
In addition, the loan is secured by the assets of Emerson Electric Co. If the company is unable to repay the loan, the assets may be seized by the lenders in order to recoup their losses.
Conclusion
RBC is leading a group of banks in the sale of a $2.75 billion loan to finance the buyout of Emerson Electric Co. The loan is being offered to investors in the form of a term loan B, which is a type of debt instrument used to finance leveraged buyouts. The loan is expected to be oversubscribed due to the strong credit profile of Emerson Electric Co. and the fact that it is being offered at a discount to par. However, the loan is not without risk and investors should be aware of the potential risks associated with the loan.