Misys shifts funds between U.S. and euro first-lien term loans

By Sara Rosenberg

New York, April 27 – Misys Ltd. upsized its U.S. seven-year covenant-light first-lien term loan B to $3,582,000,000 from a revised size of $3.42 billion and an initial amount of $3.12 billion, and downsized its euro seven-year covenant-light first-lien term loan B to €850 million from €1 billion, according to a market source.

Also, the original issue discount on the U.S. and euro first-lien term loans firmed at 99.5, the tight end of the 99 to 99.5 talk, the source said.

Pricing on the U.S. first-lien term loan is Libor plus 350 basis points with a 1% Libor floor and pricing on the euro first-lien term loan is Euribor plus 325 bps with a 1% floor.

In addition, the company reduced pricing on its €250 million eight-year covenant-light second-lien term loan to Euribor plus 700 bps from revised talk of Euribor plus 725 bps and initial talk in the range of Euribor plus 725 bps to 750 bps, the source continued.

And, the original issue discount on the euro second-lien term loan finalized at 99, the tight end of revised talk of 98.5 to 99 and tighter than initial talk of just 98.5.

The euro second-lien term loan still has a 1% floor.

The company’s credit facilities also include a $400 million five-year multi-currency revolver and a $980 million eight-year covenant-light second-lien term loan.

Pricing on the revolver is Libor plus 350 bps with a 0% Libor floor and pricing on the U.S. second-lien term loan is Libor plus 725 bps with a 1% Libor floor and an original issue discount of 99.

The first-lien term loans have 101 soft call protection for six months, and the second-lien term loans have hard call protection of 102 in year one and 101 in year two.

The debt has a ticking fee of half the spread from days 31 to 60 and the full spread thereafter.

Earlier in syndication, the U.S. second-lien term loan was upsized from $850 million and the euro second-lien term loan was downsized from €280 million.

Also, previously, talk on the revolver and U.S. first-lien term loan firmed at the low end of the Libor plus 350 bps to 375 bps talk, talk on the euro first-lien term loan was reduced from a range of Euribor plus 400 bps to 425 bps and the floor was increased from 0%, and talk on the U.S. second-lien term loan was decreased from a range of Libor plus 775 bps to 800 bps and the discount was tightened from 98.5.

Morgan Stanley Senior Funding Inc., Barclays, Citigroup Global Markets Inc., Macquarie Capital (USA) Inc. and Nomura Securities International Inc. are the lead banks on the senior secured credit facilities, with Morgan Stanley left lead on the U.S. term loan B, Citi left lead on the euro term loan B and Barclays left lead on the second-lien debt.

Proceeds will be used to help fund the acquisition of DH Corp. for C$25.50 per share in cash, including the assumption of all debt obligations including the issued convertible debentures, for a total enterprise value of about C$4.8 billion, and to refinance existing debt.

The prior upsizing to the credit facilities were used to eliminate a planned super holdco term loan.

Other funds for the transaction will come from preferred equity and equity.

Closing is expected before the end of the third quarter, subject to court approval, the approval of DH’s shareholders and other customary conditions.

Misys, a Vista Equity Partners portfolio company, is a London-based provider of financial services software. DH is a Toronto-based financial technology provider.

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