The bankers running the sale process for Subway have given the private-equity firms vying for the sandwich chain a $5 billion acquisition financing plan, hoping to overcome a challenging environment for leveraged buyouts and fetch the company's asking price of more than $10 billion, Reuters reported. Interest rates have been rising and concerns about an economic slowdown have increased since Subway said in February it was exploring a sale, making debt more expensive and less available for buyout firms pursuing deals. So far, bids for Subway have ranged between $8.5 billion and $10 billion, one of the sources said. Subway's financial adviser, JPMorgan Chase & Co., is now hoping a $5 billion debt-financing package it has put forward will show buyout firms they can borrow enough to structure an attractive deal even at a $10 billion-plus valuation. The debt financing is based on a mix of loans and bonds and its size is equivalent to 6.75 times Subway's 12-month earnings before interest, taxes, depreciation and amortization of about $750 million.
