Sourcecorp raises talk on second-lien term loan to Libor plus 900 bps

By Sara Rosenberg

New York, April 18 - Sourcecorp Inc. lifted pricing on its $200 million eight-year second-lien term loan (Caa2) to Libor plus 900 basis points from Libor plus 800 bps, according to a market source.

As before, the second-lien loan includes a 1.25% Libor floor and call protection of 102 in year one and 101 in year two.

The company's $625 million credit facility also provides for a $75 million revolver (B1) and a $350 million seven-year first-lien term loan (B1).

On Friday, talk on the first-lien term loan had been increased to Libor plus 500 bps from Libor plus 425 bps, while the 1.25% Libor floor and original issue discount of 99½ were left unchanged.

Covenants include a maximum secured leverage requirement.

Commitments are still due on Thursday.

UBS Securities LLC, Credit Suisse Securities (USA) LLC and Jefferies & Co. are the lead banks on the deal.

Proceeds will be used to help fund the company's merger with HOV Services Inc.

With the merger, shareholders of Sourcecorp and HOV will each control and receive 50% ownership of the combined company.

The combined company is expected to have about $480 million in revenue.

Closing is subject to customary conditions, including expiration of the antitrust waiting period.

Sourcecorp, a portfolio company of Apollo Management, is a Dallas-based provider of business process outsourcing and consulting services. HOV is a Troy, Mich.-based end-to-end business process outsourcing company.

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