Yahoo Finance Credit Suisse, SMBC to finance Seven & i's Speedway buy
By Michelle Sierra
NEW YORK, Aug 6 (LPC) - Credit Suisse has committed to provide a US$13bn bridge loan to back Japan’s Seven & i Holdings Co Ltd’s US$21bn purchase of Speedway gas stations, three banking sources said.
A mixture of US$8bn in private bonds and term loans, and US$5bn in sale-and-leaseback financings will replace the bridge loan at a later date, according to a Seven & i investor presentation. Bridge loans are a form of temporary financing that remain in place until a company secures permanent funding for a transaction.
Sumitomo Mitsui Banking Corporation (SMBC) is expected to lead the term loan portion of the permanent financing, two of the sources said.
No pricing information was available for the loan, which though fully underwritten, is still in early stages.
Spokespersons for Credit Suisse and SMBC declined to comment. A spokesperson for Seven & i did not return requests for comment by press time.
Seven & i, owner of the 7-Eleven convenience store chain, agreed to buy Speedway from Marathon Petroleum Corp, five months after the deal was put on hold due to the coronavirus outbreak.
The acquisition is expected to be completed in the first quarter of 2021.
BIG DEAL
The US$13bn financing is the second largest bridge facility this year behind the US$27bn loan backing T-Mobile's US$23bn acquisition of Sprint that closed in April, according to Refinitiv LPC data.
The purchase is also one of the most sizable this year, suggesting the pandemic, while forcing many companies to focus on protecting balance sheets instead of expansion, has not killed off global dealmaking altogether, according to Reuters.
The transaction follows a comprehensive restructuring from Marathon last year. The downstream energy company spun off Speedway after sustained pressure from activist investor Elliott Management.
Marathon said in a release it expects the deal, approved by the boards of both firms, to generate after-tax proceeds of about US$16.5bn. It plans to use proceeds to repay some of its more than US$30bn of debt as well as return capital to shareholder.
(Reporting by Michelle Sierra; additional reporting by Wakako Sato. Editing by Aaron Weinman and Kristen Haunss.)
