Milano Acquisition finalizes $2.4 billion term loan B at 99 OID

By Sara Rosenberg

New York, Aug. 17 – Milano Acquisition Corp., an affiliate of Veritas Capital, firmed the original issue discount on its $2.4 billion seven-year covenant-lite first-lien term loan B (B2/B+) at 99, the tight end of revised talk of 98.5 to 99 and tighter than initial talk of 98, according to a market source.

Pricing on the first-lien term loan is Libor plus 400 basis points with a 0.75% Libor floor.

The first-lien term loan has 101 soft call protection for six months.

Earlier in syndication, pricing on the first-lien term loan was reduced from talk in the range of Libor plus 425 bps to 450 bps and a 25 bps step-down was removed.

J.P. Morgan Securities LLC is the left lead bank on the deal.

Proceeds will be used to help fund the acquisition of DXC Technology’s U.S. State and Local Health and Human Services business (State & Local HHS) for $5 billion.

Other funds for the transaction will come from an $800 million privately placed second-lien term loan and equity.

Closing is expected no later than December, subject to customary conditions, including the receipt of certain third-party consents and regulatory approvals.

U.S. State and Local Health and Human Services is an end-to-end provider of technology enabled, mission critical solutions that are fundamental to the administration and operations of health programs.

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