UKG launches $2.7 billion of term loans to investors

By Sara Rosenberg

New York, Nov. 10 – UKG Inc. (Ultimate Kronos Group) held a lender call at 2 p.m. ET on Wednesday to launch $2.7 billion of term loans, according to market sources.

The debt consists of a fungible $1 billion incremental covenant-lite first-lien term loan (B1/B-) due May 2026 and a new $1.7 billion covenant-lite second-lien term loan (Caa1/CCC) due May 2027.

Pricing on the incremental first-lien term loan is Libor plus 325 basis points with a 0.75% Libor floor, in line with existing term loan pricing.

Original issue discount talk on the incremental first-lien term loan is 99.5 to 99.75.

The second-lien term loan is talked at Libor plus 575 bps with a 0.5% Libor floor and a discount of 99.75, sources said.

The incremental first-lien term loan has 101 soft call protection for six months, and the second-lien term loan has hard call protection of 102 for six months and then 101 for a year.

Credit Suisse Securities (USA) LLC and Nomura are leading the deal, with Credit Suisse the left lead and agent on the first-lien and Nomura the left lead and agent on the second-lien.

Commitments are due at 5 p.m. ET on Nov. 18, sources added.

Proceeds will be used to refinance an existing second-lien term loan, pre-fund three acquisition targets and fund a cash distribution for future acquisitions and/or a dividend.

UKG is a provider of human capital management solutions based in Weston, Fla., and Lowell, Mass.

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