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Applied Systems increases term loan sizes, tightens spreads, discounts
By Sara Rosenberg
New York, Jan. 13 - Applied Systems Inc. upsized its seven-year first-lien covenant light term loan (B1/B+) to $700 million from $675 million and its eight-year second-lien covenant-light term loan (Caa2/CCC+) to $395 million from $375 million, according to a market source.
Also, pricing on the first-lien term loan was lowered to Libor plus 325 basis points from talk of Libor plus 350 bps to 375 bps and pricing on the second-lien term loan was trimmed to Libor plus 650 bps from Libor plus 725 bps to 750 bps, the source said.
In addition, the first-lien term loan saw the addition of a step-down to Libor plus 300 bps at 4.25 times first-lien leverage.
Furthermore, the original issue discount on the first-lien term loan was tightened to 99¾ from 99 and the discount on the second-lien term loan was revised to 99¼ from 99, the source continued.
As before, both term loans have a 1% Libor floor, the first-lien loan has 101 soft call protection for six months, and the second-lien loan has call protection of 102 in year one and 101 in year two.
The company's now $1,145,000,000 credit facility, up from $1.1 billion, also provides for a $50 million revolver (B1/B+).
Recommitments were due at 5 p.m. ET on Monday.
Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. Jefferies Finance LLC and UBS Securities LLC are the lead banks on the deal.
Proceeds will be used to help fund the buyout of the company by Hellman & Friedman LLC from Bain Capital for about $1.8 billion.
As a result of the term loan upsizings, the amount of the revolver draw and the sponsor equity contribution for the buyout was reduced, the source added.
Applied Systems is a University Park, Ill.-based provider of software for the insurance industry.
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