Science Applications talks $600 million term B at Libor plus 200 bps

By Sara Rosenberg

New York, Feb. 27 – Science Applications International Corp. launched on Thursday its $600 million seven-year incremental senior secured covenant-lite term loan B (Ba1/BB+) with price talk of Libor plus 200 basis points with a 0% Libor floor and an original issue discount of 99.5, according to a market source.

The incremental term loan has 101 soft call protection for six months and amortization of 1% per annum.

Citigroup Global Markets Inc., BofA Securities, Inc., MUFG, PNC, SunTrust Robinson Humphrey Inc., U.S. Bank and Wells Fargo Securities LLC are the joint lead arrangers on the deal. Capital One, SMBC and TD Securities (USA) LLC are the co-managers.

Commitments are due at noon ET on March 5, the source added.

Proceeds will be used to help fund the $1.2 billion acquisition of Unisys Federal, a provider of infrastructure modernization, cloud migration, managed services, and enterprise IT-as-a-service through scalable and repeatable solutions to U.S. federal civilian agencies and the Department of Defense.

Other funds for the transaction are expected to come from $400 million of notes and cash on hand.

Closing is expected by May 1, subject to customary conditions, including HSR regulatory clearance.

Net leverage is expected to be around 4.5x at close.

Science Applications is a Reston, Va.-based technology integrator.

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