Skillsoft downsizes incremental first-lien loan, reworks pricing

By Sara Rosenberg

New York, Sept. 22 – Skillsoft Ltd. reduced its incremental first-lien term loan due April 28, 2021 to $465 million from $515 million and increased pricing on the debt as well as on the repricing of its existing $900 million first-lien term loan due April 28, 2021 to Libor plus 475 basis points from talk of Libor plus 425 bps to 450 bps, according to a market source.

Also, pricing on the $185 million incremental second-lien term loan due April 28, 2022 and repricing of the company’s existing $485 million second-lien term loan due April 28, 2022 was lifted to Libor plus 825 bps from talk of Libor plus 775 bps to 800 bps, the source said.

Furthermore, the original issue discount on the incremental first-lien term loan widened to 98 from talk of 99 to 99˝, and the discount on the incremental second-lien term loan was modified to 97˝ from talk of 98˝ to 99. The existing term loans are still offered at par.

In addition, the call protection on the incremental and existing first-lien debt was changed to 101 soft call protection for one year from 101 soft call protection through April 28, 2015, the source continued.

All of the term loans still have a 1% Libor floor, and the second-lien debt still has hard call protection of 102 through April 28, 2015 and 101 through April 28, 2016.

The existing first-lien term loan is being repriced from Libor plus 350 bps with a 1% Libor floor and the existing second-lien term loan is being repriced from Libor plus 675 bps with a 1% Libor floor.

Another revision made was the incremental allowance on the first-lien loan was lowered to $125 million from $200 million shared plus an unlimited amount up to 4.75 times, down from 5 times, first-lien net leverage, and the accordion on the second-lien was reduced to $125 million from $200 million shared plus an unlimited amount up to 7.5 times secured net leverage.

All first-lien term loans will be fungible and all second-lien term loans will be fungible.

Recommitments were due by 5 p.m. ET on Monday.

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.

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

Due to the downsizing of the incremental first-lien loan, the company’s existing revolver borrowings will remain outstanding, the source added.

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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