Computer Sciences eyes Oct. 15 launch for $1.25 billion term loan B

By Sara Rosenberg

New York, Oct. 7 – Computer Sciences Government Services Inc. is targeting Oct. 15 to launch its proposed $1.25 billion seven-year term loan B to institutional investors, according to a market source.

The company’s $3.5 billion senior secured credit facility (Ba2/BB+/BBB) also includes a $500 million five-year revolver, a $500 million three-year term loan A-1 and a $1.25 billion five-year term loan A-2, the source said.

The revolver and term loan A debt was launched to bank investors with a meeting in New York on Tuesday that was heard to be well attended.

Price talk on the revolver and term loan A-2 is Libor plus 175 basis points, and talk on the term loan A-1 is Libor plus 162.5 bps, the source added.

Mitsubishi UFJ Financial Group (MUFG) and RBC Capital Markets are the lead banks on the deal.

Proceeds will be used to fund the $10.50 per share special cash dividend being paid in the spin-off of Computer Sciences Government Services from Computer Sciences Corp., to finance the $390 million acquisition of SRA by Computer Sciences Government Services from Providence Equity Partners and SRA’s founder, Dr. Ernst Volgenau, as well as members of its management team, and to refinance SRA’s existing $1 billion of net debt.

Computer Sciences Government Services is a Falls Church, Va., provider of IT services to the U.S. federal government. SRA is a Fairfax, Va.-based provider of IT and professional services to the U.S. federal government.

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