Serena $450 million credit facility expected to launch next month

By Sara Rosenberg

New York, Jan. 23 - Serena Software Inc. has narrowed down timing on the launch of its proposed $450 million senior secured credit facility with the anticipation that a bank meeting will be held in February, according to a market source.

Lehman Brothers, Merrill Lynch and UBS Securities are the joint lead arrangers on the credit facility, with Lehman the administrative agent.

The credit facility consists of a $375 million seven-year term loan and a $75 million six-year revolver.

Pricing on the credit facility is expected to be Libor plus 225 basis points if the deal is rated B1/B+ with stable outlooks or higher, otherwise it will be Libor plus 250 bps.

Amortization on the term loan is 1% per year on a quarterly basis with the balance due at maturity.

The company will also have the ability to upsize its credit facility by up to $150 million through the addition of incremental term loans or an increase in revolver commitments.

Proceeds from the facility, along with proceeds from a minimum $225 million unsecured senior subordinated notes offering, will be used to help fund the leveraged buyout of Serena by Silver Lake Partners.

Under the LBO agreement, Silver Lake Partners has agreed to acquire Serena for $1.2 billion. Serena stockholders will receive $24.00 in cash in exchange for each share of stock. Any of Serena's existing $220 million of convertible notes that are not converted to Serena stock prior to completion of the proposed transaction will be exchanged for cash in an amount of $24.00 for each Serena share.

The transaction is expected to be completed in the first quarter, subject to receipt of stockholder approval and customary regulatory approvals as well as satisfaction of other closing conditions, including receipt of debt financing.

Serena is a San Mateo, Calif., provider of software products for managing process and controlling change across the information technology environment.

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