Ancestry.com Seeks to Refinance $1.75 Billion in Leveraged Buyout Debt

Ancestry.com Inc. is seeking to refinance a $1.75 billion term loan that was originally used to finance its acquisition by private equity funds managed by Blackstone Inc. The move places the family history platform among a growing number of highly leveraged companies looking to manage their debt profiles ahead of looming maturities.

The Proposed Deal

According to a Bloomberg report citing a person familiar with the matter, the company is offering the new term loan to investors at a margin of 4 to 4.25 percentage points over the benchmark lending rate. The debt is also being marketed at a slight discount, with a proposed price of 98.5 to 99 cents on the dollar.

Proceeds from the new loan, along with an additional $500 million offering of junk-rated notes, will be used to repay the debt incurred during its $4.7 billion sale to Blackstone in 2020. This type of refinancing is a common strategy for companies owned by private equity to extend debt timelines and potentially secure more favorable terms.

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A Broader Market Trend

The transaction is part of a significant trend in the U.S. credit markets. This year, nearly 80% of issuance in the U.S. leveraged loan market has been for refinancing or repricing existing debt, rather than for new acquisitions or capital expenditures.

Companies are proactively addressing a so-called "maturity wall," with approximately $241 billion of loans in the Bloomberg US Leveraged Loan Index scheduled to mature in the next two years. While demand for such deals has been generally strong, some issuers, like CoreLogic Inc., have had to increase the interest rates offered to attract sufficient investor capital, signaling a discerning market.