JPMorgan may offer large discount to sell Qualtrics debt
Banks are planning to market nearly $2 billion of high-yield bonds for the software firm at a significant discount.
Banks led by JPMorgan Chase & Co. may offer one of the largest discounts this year to sell approximately $2 billion of debt belonging to software firm Qualtrics International Inc., according to a report by Mint.
The underwriters are reportedly holding meetings with investors this week to discuss the high-yield bond sale. Initial indications suggest the debt could be marketed with a coupon of at least 8 per cent and a rate of about 85 cents on the dollar.
The debt relates to a $6.75 billion deal from over a year ago where Qualtrics agreed to purchase data analytics firm Press Ganey Forsta. Eleven banks initially committed about $5.3 billion in financing for that transaction.
The banks paused discussions in March during a software sector selloff driven by concerns regarding artificial intelligence. The underwriters ended up funding the purchase themselves and faced expected paper losses exceeding $500 million.
Qualtrics recently reported third-quarter revenue of $711 million, down from $718 million in the second quarter. The company's revenue grew 2 per cent compared to a year ago, which was slower than the 6 per cent and 7 per cent growth reported in the previous two quarters.
The debt sale could occur as early as next week and be priced before the Thanksgiving holiday. Representatives for JPMorgan, Qualtrics, and private equity firm Silver Lake declined to comment.