Avago Technologies to launch $7.5 billion term loan B on Tuesday

By Sara Rosenberg

New York, Oct. 30 – Avago Technologies Ltd. is set to hold a bank meeting on Tuesday to launch a $7.5 billion seven-year covenant-light term loan B, according to a market source.

Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Barclays, Citigroup Global Markets Inc., Wells Fargo Securities LLC, BMO Capital Markets Corp., Nomura and Bank of Tokyo-Mitsubishi UFJ are the leads on the deal.

Proceeds will be used to help fund the acquisition of Broadcom Corp. and to refinance existing debt.

Back in August, the company syndicated via left lead-Credit Suisse a $500 million five-year revolver and a $4.25 billion five-year term loan A for the Broadcom transaction.

Pricing on the term loan A, which was upsized during syndication from $3.25 billion, is Libor plus 150 basis points to 200 bps, subject to a ratings-based grid.

Under the agreement, Avago will acquire Broadcom for $17 billion in cash consideration and the economic equivalent of about 140 million Avago ordinary shares, valued at $20 billion as of May 27. Broadcom shareholders will own around 32% of the combined company.

Closing is expected in the first quarter of 2016, subject to regulatory approvals in various jurisdictions and the approval of Avago’s and Broadcom’s shareholders.

Avago is a designer, developer and supplier of analog semiconductor devices with headquarters in Singapore and San Jose, Calif. Broadcom is an Irvine, Calif.-based provider of semiconductor solutions for wired and wireless communications.

The combined company will adopt the name Broadcom Ltd.

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