An affiliate of private equity investor Onex is seeking to raise $2.4 billion in debt to fund the leveraged buyout of Canadian carrier WestJet.
Kestrel Bidco, formed by Onex, intends to raise a $2 billion first-lien secured term loan, which will be used to fund the purchase of the carrier along with CAD $1.65 billion ($1.25 billion) of common equity.
Kestrel Bidco, which will own all of WestJet when the deal closes, is also preparing to raise a new $350 million secured revolving credit facility.
Both deals launched on 26 July. The term loan, which matures in August 2026, is expected to price at Libor plus 300-325 basis points, Bloomberg data shows. The revolver will mature in 2024.
The transactions are rated ‘BB+’ by Fitch Ratings, ‘Ba2” by Moody’s Investors Service and ‘BB-’ by S&P Global Ratings. Kestrel Bidco received issuer ratings of ‘BB-‘, ‘Ba3’ and ‘B+’, respectively.
Barclays is leading the deal. Joint bookrunners include Bank of Montreal, Bank of Nova Scotia, Citi, Morgan Stanley, RBC Dominion Securities, Toronto Dominion Bank and UBS.
Kestrel Bidco’s debt structure will include the $350 million secured revolving credit facility, the $2 billion term loan and about C$520 million of export credit loans from the Export Development Canada (EDC), S&P Global writes in a report today.
Source: Cirium Dashboard