NEW YORK, Jan 25 (LPC) – US high-grade companies, including Bristol-Myers Squibb, are boosting the loan element of multibillion dollar acquisition financings in a move that could stretch some banks balance sheets.
Loans are currently cheaper than bonds, which is prompting companies to increase Term Loan A paper and potentially postpone tapping volatile and expensive bond markets.
Floating-rate term loans are also easier to prepay than longer-term bonds and their inclusion could help to address credit rating agency and market concerns about huge debt loads incurred in big corporate tie-ups.
Bristol-Myers Squibb lined up US$8bn in term loans to reduce a US$33.5bn bridge loan put in place early this month to support its US$74bn purchase of …
Read the full article at: https://www.reuters.com/article/ma-termloans/us-companies-turning-to-term-loans-for-acquisition-debt-idUSL1N1ZP0X0