BMC Software sets price talk in $1.83 billion equivalent two-part deal, pricing Thursday

By Paul A. Harris

Portland, Ore., Aug. 9 – BMC Software set price talk for its offering of $1,825,000,000 of eight-year senior notes (Caa2/CCC+) on Thursday, according to market sources.

The Rule 144A and Regulation S for life offering is coming in tranches of dollar-denominated notes talked to yield in the 9 5/8% area, at the tight end of early guidance in the 9¾% area, and in euro-denominated notes talked to yield 8¼% to 8½%, slightly wide of early guidance in the 8¼% area.

Tranche sizes remain to be determined.

The deal underwent covenant changes bearing primarily upon how the company may disburse cash and incur additional debt.

Books close at noon ET Thursday and the deal is set to price thereafter.

Goldman Sachs & Co. is the left bookrunner. Credit Suisse Securities (USA) LLC, KKR Capital Markets, Jefferies LLC, Macquarie Capital, Mizuho Securities and Barclays are the joint bookrunners.

The notes come with three years of call protection.

Proceeds, along with new credit facilities, PIK preferred equity, sponsor equity and cash on hand, will be used to help fund the buyout of the company by KKR from a private investor group led by Bain Capital Private Equity and Golden Gate Capital together with GIC, Insight Venture Partners and Elliott Management, and to refinance certain debt.

The issuing entity will be Banff Merger Sub Inc., which is to be merged with and into Boxer Parent Co. Inc., entities created by KKR for the purpose of completing the buyout.

BMC is a Houston-based provider of software solutions for the digital enterprise.

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