Banks are starting to sound out investors for a financing that will pay for Roark Capital Group’s leveraged buyout of sandwich chain Subway in a bond deal that could be among the largest of its kind, according to Bloomberg News.
Subway has asked Morgan Stanley (NYSE: MS) and Barclays (NYSE: BCS) to put together the debt package in the form of a whole business securitization, a type of borrowing in which a company effectively pledges most of its assets in exchange for cheaper financing, as reported by Bloomberg. The banks are arranging in-person events in Boston, New York and Los Angeles starting May 8 to pitch the deal to potential buyers, Bloomberg reported. Roark won the race to acquire the U.S. sandwich chain in August, after fending off a late challenge from a rival bid group led by TDR Capital and Sycamore Partners.
The seven banks that have committed financing for the Subway acquisition are Morgan Stanley, Barclays, JPMorgan (NYSE: JPM), Mizuho Financial Group Inc. (NYSE: MFG), MUFG (NYSE: MUFG), Rabobank and Wells Fargo (NYSE: WFC), as reported by Bloomberg.