Applied Systems shifts funds between first- and second-lien loans

By Sara Rosenberg

New York, Feb. 7 – Applied Systems Inc. upsized its seven-year first-lien term loan (B2/B-) to $2.42 billion from $2.365 billion and downsized its eight-year second-lien term loan (Caa2/CCC) to $565 million from $620 million, according to a market source.

Also, pricing on the second-lien term loan was reduced to SOFR plus 525 basis points from talk in the range of SOFR plus 550 bps to 575 bps and the issue price was tightened to par from 99.5, the source said.

In addition, the original issue discount on the first-lien term loan was revised to 99.875 from 99.5.

Pricing on the first-lien term loan remained at SOFR plus 350 bps with a 0% floor and no CSA, and the debt still has 101 soft call protection for six months.

The second-lien term loan still has a 0% floor, no CSA and call protection of 102 in year one and 101 in year two.

The company’s $3.135 billion of credit facilities also include a $150 million five-year revolver (B2/B-).

Nomura Securities, Jefferies LLC, JPMorgan Chase Bank, Macquarie Capital (USA) Inc., Morgan Stanley Senior Funding Inc. and Santander are the arrangers on the deal.

Recommitments were scheduled to be due at noon ET on Wednesday, the source added.

Proceeds will be used to refinance the company’s existing capital structure, repurchase minority equity share, and pay fees and expenses.

Applied Systems is a University Park, Ill.-based cloud software provider to the property & casualty and benefits insurance industry.

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