Misys lifts U.S. second-lien loan size, drops euro second-lien plans

By Sara Rosenberg

New York, April 28 – Misys Ltd. upsized its U.S. eight-year covenant-light second-lien term loan to $1,245,000,000 from $980 million and eliminated plans for a €250 million eight-year covenant-light second-lien term loan, according to a market source.

The structure change was done to optimize the currency exposure profile of the company, the source said.

Pricing on the U.S. second-lien term loan is Libor plus 725 basis points with a 1% Libor floor and an original issue discount of 99.

The second-lien term loan has hard call protection of 102 in year one and 101 in year two.

The eliminated euro second-lien term loan was talked at Euribor plus 700 bps with a 1% floor and a discount of 99, and included hard call protection of 102 in year one and 101 in year two as well.

Misys’ new credit facilities also include a $400 million five-year multi-currency revolver, a $3,582,000,000 seven-year covenant-light first-lien term loan B and an €850 million seven-year covenant-light first-lien term loan B.

Revolver pricing is Libor plus 350 bps with a 0% Libor floor.

Pricing on the U.S. first-lien term loan is Libor plus 350 bps with a 1% Libor floor, and pricing on the euro first-lien term loan is Euribor plus 325 bps with a 1% floor. Both of these loans have an original issue discount of 99.5 and 101 soft call protection for six months.

The company’s U.S. and euro term loans have a ticking fee of half the spread from days 31 to 60 and the full spread thereafter.

Earlier in syndication, revolver pricing finalized at the low end of the Libor plus 350 bps to 375 bps talk, the U.S. first-lien term loan was upsized from a revised amount of $3.42 billion and an initial amount of $3.12 billion and pricing was set at the low end of the Libor plus 350 bps to 375 bps talk, the euro first-lien term loan was downsized from €1 billion, pricing was cut from talk of Euribor plus 400 bps to 425 bps and the floor was increased from 0%, and the discount on both first-lien term loans firmed at the tight end of the 99 to 99.5 talk.

Also previously, the U.S. second-lien term loan was upsized from $850 million, the spread was lowered from talk of Libor plus 775 bps to 800 bps and the discount was modified from 98.5.

And, the now eliminated euro second-lien term loan had previously been downsized from €280 million, pricing was reduced from revised talk of Euribor plus 725 bps and initial talk in the range of Euribor plus 725 bps to 750 bps, and the discount had been set at the tight end of revised talk of 98.5 to 99 and tighter than initial talk of just 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 deal, 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 with preferred equity and equity to fund the acquisition of DH Corp. for C$25.50 per share in cash, including the assumption of all debt, for a total enterprise value of about C$4.8 billion, and to refinance existing debt.

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

Closing on the acquisition 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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