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(Bloomberg) — A group of banks led by UBS Group AG has been forced to fund a portion of the $2 billion of debt they had agreed to provide for the buyout of a unit of Roper Technologies Inc., according to people with knowledge of the matter.
Private equity firm Clayton Dubilier & Rice, which purchased a majority stake in Roper’s industrial operations business, has agreed to buy back a chunk of the debt financing, partly relieving the burden for banks, said the people, who asked not to be identified because the transaction is private.
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The deal is the latest in a series of leveraged financings that banks have been forced to fund with their own cash as debt investors pared back risk. Banks have been saddled with more than $40 billion of such debt this year, but have been able to trim their exposure in certain cases by offloading bonds and loans to institutional investors at steep discounts.
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The group of lenders on the CD&R deal, which closed on Tuesday according to a filing, also includes Royal Bank of Canada, BNP Paribas SA, BMO Financial Group, Mizuho Financial Group Inc. and Natixis. The total debt financing was about $2 billion, the filing shows.
Representatives for CD&R, UBS, BNP and Mizuho declined to comment. RBC, BMO and Natixis did not immediately respond to requests for comment.
—With assistance from Paula Seligson and Gillian Tan.