VFS Aims to Refinance Private Debt With $2 Billion From Banks

(Bloomberg) — VFS Global, a Switzerland-based provider of outsourced visa and consular services, is seeking to raise $2 billion-equivalent in term loans to refinance existing unitranche debt.

The financing will consist of loans in dollars and euros. Pricing on the seven-year, dollar-denominated term loan B is indicated at 300 basis points over the secured overnight financing rate. The euro-denominated loan is set to earn investors a spread of 325 basis points over Euribor.

Blackstone Inc. lined up a 1.1 billion Swiss franc ($1.1 billion) loan from Apollo Global Management Inc. to fund its 2022 buyout of VFS Global, Bloomberg News reported at the time.

VFS joins other private credit borrowers in looking to the hot market for broadly syndicated debt, taking advantage of the relatively cheap borrowing available there. Over the summer, software business KnowBe4 Inc. and calibration-services provider Trescal refinanced unitranche debt via term loans.

Private credit lenders in recent years have slashed their pricing in an effort to maintain market share as they watched many of their largest borrowers switch to less expensive broadly syndicated debt. While private credit tends to offer borrowers greater speed and certainty of execution, it typically comes at a higher cost.

Barclays Plc and Deutsche Bank AG are joint physical bookrunners on the VFS deal. The loans are expected to be rated B1 by Moody’s Ratings and B+ by S&P Global Ratings.

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