JPMorgan Weeds Steep Discount on $5bn Qualtrics Debt Sale

✦ Meridian Analysis

A consortium of banks led by JPMorgan Chase is rumoured to be preparing a discounted sale of roughly $2 billion of the $5 billion high‑yield bond package that finances the Silver Lake‑owned software firm Qualtrics. The debt was originally raised to fund Qualtrics’ $6.75 billion acquisition of Press Ganey Forsta, but a March software sell‑off linked to AI‑related concerns forced the 11‑bank syndicate to fund the deal itself, exposing lenders to paper losses estimated at more than $500 million. The banks are said to be marketing the bonds with a coupon of at least 8 percent and a price near 85 cents on the dollar, representing one of the deepest new‑issue discounts in the U.S. high‑yield market this year. The banks are considering retaining the remaining tranche for at least six months before a possible leveraged‑loan placement. Qualtrics’ third‑quarter revenue slipped to $711 million and year‑on‑year growth slowed to 2 percent, despite generating over $1.1 billion of cash in the last twelve months. Deal professionals will be watching for the final pricing, the exact size of the tranche sold, and any ancillary financing that may follow the initial bond offering. Details on the advisers involved, regulatory clearances and the precise timetable for the launch, slated for next week ahead of Thanksgiving, have not been disclosed.

The Meridian Weekly