McAfee revises U.S. and euro term loan sizes, updates pricing

By Sara Rosenberg

New York, Feb. 3 – McAfee Corp. upsized its U.S. and euro term loans to a total size of $6.96 billion equivalent from a revised amount of $6.66 billion equivalent and an initial amount of $5.66 billion equivalent, according to a market source.

The U.S. seven-year term loan B is sized at $5.16 billion, up from an initial size of $4.41 billion, and the euro seven-year term loan B is sized at $1.8 billion equivalent, up from an initial size of $1.25 billion equivalent, the source said.

Pricing on the U.S. term loan firmed at SOFR plus 400 basis points, the high end of the SOFR plus 375 bps to 400 bps talk, and one of the two 25 bps step-downs based on first-lien net leverage was removed, leaving a step-down at 5x first-lien net leverage.

The euro term loan pricing finalized at Euribor plus 425 bps, the high end of the Euribor plus 400 bps to 425 bps talk, and one of three leverage-based step-downs was removed, leaving a 25 bps step-down at 5x first-lien net leverage and a 25 bps step-down at 4.5x first-lien net leverage, the source continued.

Also, a ticking fee was added to the term loans of half the margin from days 46 to 90 and the full margin thereafter, MFN was revised to 75 bps with a 12 month sunset from 100 bps with a six month sunset, the inside maturity basket was eliminated, changes were made to restricted payments and investments, and J. Crew language was added.

The U.S. term loan still has a 10 bps CSA, a 0.5% floor and an original issue discount of 99.5, the euro term loan still has a 0% floor and a discount of 99.5, and both term loans still have a 25 bps initial public offering-based step-down and 101 soft call protection for six months.

The company’s now $7.96 billion of credit facilities include a $1 billion revolver as well.

JPMorgan Chase Bank, BofA Securities Inc., Credit Suisse, Barclays, Citigroup Global Markets Inc., HSBC Securities, RBC Capital Markets, UBS Investment Bank, BMO Capital Markets, KKR Capital Markets, Macquarie Capital, Mizuho, MUFG, Nomura, Wells Fargo Securities LLC, BNP Paribas Securities Corp., CIBC, Citizens, Credit Agricole, Fifth Third, Intesa Sanpaolo, KeyBanc Capital Markets, Natixis, Societe Generale, Standard Chartered, Stifel, SMBC, TD Securities and Bank of Nova Scotia are the leads on the deal.

Recommitments were scheduled to be due at 11 a.m. ET on Thursday, the source added.

Proceeds will be used to help fund the buyout of the company by an investor group led by Advent International Corp., Permira Advisers LLC, Crosspoint Capital Partners, Canada Pension Plan Investment Board, GIC Private Ltd. and Abu Dhabi Investment Authority for $26.00 per share in an all-cash transaction valued at about $12 billion on an equity value basis, and over $14 billion on an enterprise value basis after giving effect to repayment of McAfee debt.

Other funds for the transaction will come from $2.02 billion of senior notes, a preferred stock offering and equity.

The senior notes were downsized from $2.32 billion with the most recent upsizing to the term loans and plans for a $1 billion secured notes offering were cancelled with the original upsizing to the term loans.

Closing is expected in the first half of this year, subject to customary conditions, including approval by McAfee shareholders, receipt of regulatory approvals, and clearance by the Committee on Foreign Investment in the U.S.

McAfee is a San Jose, Calif.-based provider of online protection for consumers.

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