UKG shifts funds between first- and second-lien term loans

By Sara Rosenberg

New York, Nov. 18 – UKG Inc. (Ultimate Kronos Group) upsized its fungible incremental covenant-lite first-lien term loan due May 2026 to $1.25 billion from $1 billion and downsized its covenant-lite second-lien term loan due May 2027 to $1.45 billion from $1.7 billion, according to market sources.

Also, pricing on the second-lien term loan was reduced to Libor plus 525 basis points from Libor plus 575 bps and the issue price was changed to par from 99.75, sources said.

Additionally, the issue price on the incremental first-lien term loan was tightened to par from talk in the range of 99.5 to 99.75.

The second-lien term loan still has a 0.5% Libor floor and hard call protection of 102 for six months and 101 for a year.

Pricing on the company’s incremental first-lien term loan and repriced existing $3.213 billion first-lien term loan due May 2026 remained at Libor plus 325 bps with a 0.5% Libor floor, and the repriced term loan still has a par issue price.

As before, the incremental first-lien term loan and existing first-lien term loan are getting 101 soft call protection for six months.

Previously in syndication, the Libor floor on the incremental first-lien term loan was reduced from 0.75% and the company added the repricing of the existing first-lien term loan to cut the Libor floor to 0.5% from 0.75% but leave the spread unchanged.

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.

Recommitments were scheduled to be due at noon ET on Thursday, sources added.

Proceeds from the incremental first-lien term loan and second-lien term loan 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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