UPDATE:Bks Commit $2 Billion Financing Backing BlackRock BGI Buy-Sources
16 Juni 2009 - 6:19PM
Dow Jones News
Barclays Capital, Citigroup Inc. (C) and Credit Suisse Group
(CS) have committed $2 billion in financing to back BlackRock
Inc.'s (BLK) purchase of Barclays Global Investors business,
according to several people familiar with the transaction.
BlackRock last week reached an agreement to buy the indexing
giant from U.K. bank Barclays PLC (BCS) for $13.5 billion. The deal
creates a money-management giant roughly twice the size of its
closest competitor.
The financing is structured as a 364-day revolving credit
facility, which is expected to be refinanced at a later stage
through proceeds from debt offerings as well as any capital raising
efforts, one of the people said.
The revolver is seen paying around 2% over the London interbank
offered rate, or Libor, another person said.
The transaction, which is expected to close in the fourth
quarter, gives Barclays a 19.9% stake in BlackRock. As a result,
Barclays is providing the bulk of the $2 billion revolver, the
first person said.
Another person said that Barclays would stump up $1.2 billion of
the total amount, with Citigroup and Credit Suisse providing the
remainder. Both Citi and Credit Suisse acted as lead financial
advisers to BlackRock.
So far only these three banks have committed to the financing,
but their final exposures could be lower than their original
commitments because more institutions are expected to join if the
loan is syndicated, the first person said.
A spokesman for BlackRock declined to comment on the
financing.
The transaction is subject to approval by Barclays shareholders
and regulators.
-By Kate Haywood, Dow Jones Newswires; 212-416-2218;
kate.haywood@dowjones.com
(Carol Dean in London contributed to this report.)