Applied Systems tightens pricing on first- and second-lien term loans

By Sara Rosenberg

New York, Sept. 13 – Applied Systems Inc. reduced pricing on its $1.03 billion seven-year first-lien term loan B (B1/B) to Libor plus 325 basis points from Libor plus 350 bps and added a step-down to Libor plus 300 bps at 4.75 times net first-lien leverage, according to a market source.

Also, the company trimmed pricing on its $495 million eight-year second-lien term loan (Caa2/CCC) to Libor plus 700 bps from talk of Libor plus 725 bps to 750 bps, the source said.

Furthermore, the issue price on the first-lien term loan was changed to par from 99.5 and the issue price on the second-lien term loan was tightened to par from 99.

As before, both term loans have a 1% Libor floor, the first-lien term loan has 101 soft call protection for six months, and the second-lien term loan has hard call protection of 102 in year one and 101 in year two.

The company’s $1,575,000,000 of credit facilities also include a $50 million five-year revolver (B1/B).

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

Recommitments were scheduled to be due at 5 p.m. ET on Wednesday, the source added.

Allocations are targeted for Thursday.

Proceeds will be used to refinance existing debt, fund a distribution to shareholders and pay fees and expenses.

Closing is expected during the week of Sept. 18.

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

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