Skillsoft sets first- and second-lien term loan talk with launch

By Sara Rosenberg

New York, Sept. 10 – Skillsoft Ltd. released price talk on its $515 million incremental first-lien term loan due April 28, 2021 and $185 million incremental second-lien term loan due April 28, 2022 in connection with its bank meeting on Wednesday, and disclosed that it will be repricing its existing first- and second-lien term loan debt to match the incremental term loans, according to a market source.

The incremental first-lien term loan and existing $900 million first-lien term loan due April 28, 2021 are talked at Libor plus 425 basis points to 450 bps with a 1% Libor floor, and the incremental second-lien term loan and existing $485 million second-lien term loan due April 28, 2022 are talked at Libor plus 775 bps to 800 bps with a 1% Libor floor, the source said.

By comparison, current existing first-lien term loan pricing is Libor plus 350 bps with a 1% Libor floor and current existing second-lien term loan pricing is Libor plus 675 bps with a 1% Libor floor.

The incremental first-lien term loan is being talked with an original issue discount of 99 to 99½, the incremental second-lien term loan is being talked at a discount of 98½ to 99, and the existing first- and second-lien term loan debt are offered at par.

Call protection on the incremental debt will match the existing loans, so the first-lien debt has 101 soft call protection through April 28, 2015 and the second-lien debt has hard call protection of 102 through April 28, 2015 and 101 through April 28, 2016.

All first-lien term loans will be fungible and all second-lien term loans will be fungible, the source continued.

Barclays, Morgan Stanley Senior Funding Inc., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. are the bookrunners on the covenant-light financing, with Barclays the left lead on the first-lien loan and Morgan Stanley the left lead on the second-lien loan.

Commitments are due on Sept. 19, the source added.

Proceeds from the $700 million of incremental term loans will be used to fund the acquisition of SumTotal Systems LLC from Vista Equity Partners.

Closing is subject to various conditions, including the expiration of the applicable waiting period under the Hart-Scott-Rodino Act.

Skillsoft, a Charterhouse Capital Partners LLP portfolio company, is a Dublin-based provider of cloud-based learning services. SumTotal is a Gainesville, Fla.-based provider of integrated HR solutions.

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