Applied Systems firms second-lien term loan at Libor plus 550 bps

By Sara Rosenberg

New York, March 1 – Applied Systems Inc. finalized pricing on its repriced $615 million covenant-lite second-lien term loan due September 2025 at Libor plus 550 basis points, the low end of the Libor plus 550 bps to 575 bps talk, according to a market source.

As before, the second-lien term loan has a 0.75% Libor floor, a par issue price and 101 hard call protection for one year.

The company’s fungible $470 million incremental covenant-lite first-lien term loan due September 2024 and repricing of its existing $1.35 billion covenant-lite first-lien term loan due September 2024 remained at Libor plus 300 bps with a step-up to Libor plus 325 bps at more than 4.75x first-lien net leverage, a 0.5% Libor floor, a par issue price and 101 soft call protection for six months. Upon delivering Dec. 31, 2020 financials, the spread will be subject to the grid.

Previously in syndication, the incremental first-lien term loan was upsized from $420 million and the Libor floor was lowered from 1%, and the first-and second-lien term loan repricings were added.

Nomura Securities, Jefferies LLC and Macquarie Capital (USA) Inc. are the lead arrangers on the deal.

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.

The repricing of the first-lien term loan will leave the spread unchanged but reduce the Libor floor from 1%, and the second-lien term loan repricing will take pricing down from Libor plus 700 bps with a 1% Libor floor.

Closing is expected during the week of March 8.

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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