A combined US$2.05 billion of leveraged loans have been launched to finance the buyout of educational software company Instructure Holdings Co, kicking off an expected fall flurry of such funding deals.

The financing includes a US$1.685 billion first-lien term loan B and a US$365 million second-lien term loan, with respective tenors of seven and eight years, according to a person familiar with the matter who isn’t authorised to speak publicly and asked not to be identified. Morgan Stanley and KKR Capital Markets are respectively leading the tranches, the person added. A lender call is scheduled for Wednesday.

A group led by Morgan Stanley had agreed to provide a roughly US$2 billion debt package to finance the buyout, Bloomberg previously reported. KKR & Co emerged as the winner to purchase Instructure, with July’s deal valuing the software firm at US$4.8 billion including debt. The acquisition is expected to close this year.

Financings for leveraged buyouts are ramping up this fall ahead of the US elections. Barclays plc estimated that US$55 billion to US$65 billion of junk bonds and leveraged loans would be sold in September, with an increasing share to fund acquisition activity. Refinancings and repricings have dominated the leveraged-loan market this year.

  - Bloomberg