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Applied Systems ups incremental loan to $470 million, adds repricings
By Sara Rosenberg
New York, Feb. 23 – Applied Systems Inc. upsized its fungible incremental covenant-lite first-lien term loan due September 2024 to $470 million from $420 million and lowered the Libor floor to 0.5% from 1%, according to a market source.
Pricing on the incremental first-lien term loan is still Libor plus 300 basis points with a step-up to Libor plus 325 bps at more than 4.75x first-lien net leverage, in line with existing first-lien term loan pricing. Upon delivering Dec. 31, 2020 financials, the spread will be subject to the grid.
The incremental term loan continues to be offered at par.
The company added a repricing of its existing $1.35 billion covenant-lite first-lien term loan due September 2024 to lower the Libor floor to 0.5% from 1%, the source said.
The first-lien term loan repricing is offered at par.
All of the first-lien term loan debt is getting 101 soft call protection for six months.
Furthermore, the company added a repricing of its existing $615 million covenant-lite second-lien term loan due September 2025 that is talked at Libor plus 550 bps to 575 bps with a 0.75% Libor floor and a par issue price, the source continued.
Included in the repriced second-lien term loan is 101 hard call protection for one year.
The repricing will take the existing second-lien term loan down from Libor plus 700 bps with a 1% Libor floor.
Nomura Securities is the lead arranger on the deal.
Commitments continue to be due at noon ET on March 2, the source added.
Proceeds from the incremental term loan will be used to fund the acquisition of EZLynx, raise cash for general corporate purposes and pay fees and expenses.
Applied Systems is a University Park, Ill.-based cloud software provider to the property & casualty and benefits insurance industry. EZLynx is a Lewisville, Tex.-based provider of insurance software.
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