QXO Building Products Inc. has drawn robust investor interest for debt intended to fund its agreed acquisition of TopBuild Corp., according to people familiar with the deal.
The company?s $3 billion high-yield bond sale - a component of a broader $6 billion debt package backing the purchase - received orders in excess of $10 billion on Tuesday, more than triple the amount being offered, the people said. In parallel, the loan element of the financing was fully subscribed.
Market participants also showed appetite earlier in the day for the leveraged loan portion of the package. Sources familiar with the transaction said QXO?s $3 billion leveraged loan offering drew at least $4.5 billion from investors.
QXO, based in Greenwich, Connecticut and a supplier of building materials including drywall panels and gutters, agreed in April to buy insulation specialist TopBuild for about $17 billion. The bond and loan sales are scheduled to price on Wednesday.
The strong demand comes amid a stretch in which investors focused on the riskier segments of the U.S. debt market have been receptive to new issuance tied to mergers and acquisitions. That issuance follows a wave of activity in other corners of the corporate debt market, where borrowers have been raising capital to extend maturities or reduce existing borrowing costs.
With both debt tranches drawing oversubscription, QXO appears positioned to secure the financing laid out in its transaction plan. The combination of a fully subscribed loan and bond orders exceeding supply by more than three times signals notable investor demand for the financing that will underpin the TopBuild purchase.
As of the latest reports, the bond and loan are expected to complete pricing on Wednesday, finalizing a key step in the funding package for QXO?s acquisition of TopBuild.
Context
The reported oversubscription figures cover the $3 billion junk-bond tranche and the leveraged loan offering tied to the same financing package. The broader package totals $6 billion and is dedicated to funding QXO?s roughly $17 billion acquisition of TopBuild.