LOS ANGELES: A group of banks led by JPMorgan Chase & Co is expected to shoulder paper losses of more than US$500mil on a debt deal for software firm Qualtrics International Inc, according to people with knowledge of the matter.
The banks are preparing to use their own balance sheets to fund US$5.3bil of debt for Qualtrics’ acquisition of Press Ganey Forsta, said the people, asking not to be identified discussing private details. That would make it the biggest “hung” deal in the leveraged finance market this year.
The lenders decided not to launch a formal offering after pausing early discussions on the deal in March, when investors in the leveraged loan and junk-bond markets balked because of Qualtrics’ exposure to the software rout.
Qualtrics, which makes online survey tools, has emerged as one of the highest-profile examples of the pain plaguing software firms as investors reassess business models across the industry given the rapid advances in artificial intelligence. — Bloomberg
