(Bloomberg) — Bank of America Corp. is reaching out to investors to gauge their interest in part of the $15 billion in debt for the buyout of Citrix Systems Inc., the first step in a multi-week effort to offload the financing.
The bank, leading the syndicate for a $7.05 billion leveraged loan for Citrix, has indicated that pre-marketing for the deal could start next week, potentially leading to an official launch as soon as the following week, according to people with knowledge of the matter.
Bank of America had informal conversations with large investors that would typically put in orders for $250 million or more, according to one of the people, who asked not to be identified when discussing a private transaction.
Talks with investors thus far are considered preliminary and subject to change, the people said.
Vista Equity Partners and Elliott Investment Management agreed to take Citrix private in January for $16.5 billion and to combine it with Tibco Software, a company that is already in Vista’s portfolio.
Citrix said on Monday that Tom Krause, who stepped down as president of Broadcom Inc.’s software group, will become chief executive officer of the company being formed via its merger with Tibco.
The investment discussions have included few details on how much of the debt will be available for general syndication and at what price, the people said.
The financing is seen as one of the most challenging for banks to pass on to investors in the current risk-off environment, potentially costing banks hundreds of millions of dollars in losses.
Read more: Wall Street Faces Billion-Dollar Losses on Sinking Buyout Debt
A representative for Bank of America didn’t immediately respond to a request to comment.
The original financing agreement also includes a $4 billion secured bridge loan and a $3.95 billion unsecured bridge loan, both of which are expected to be replaced by high-yield bonds.
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