Ultimate Software frees up; NSO, Staples tweak deals; RadNet, Barracuda move deadlines

By Sara Rosenberg

New York, April 8 – Ultimate Software Group Inc.’s credit facilities allocated and surfaced in the secondary market on Monday morning, with the first-lien term loan quoted above par.

Moving to the primary market, NSO Group increased the size of its term loan, set U.S. and euro tranche amounts and modified the original issue discount, Staples Inc. downsized its term loan and divided it into two tranches, and RadNet Management Inc. and Barracuda Networks Inc. accelerated the commitment deadlines for their term loans.

Furthermore, Vizient Inc. and Hexion International Holdings BV released price talk with launch, and Sundyne US Purchaser Inc. and Blackstone Mortgage Trust Inc. joined this week’s new issue calendar.

Ultimate Software breaks

Ultimate Software’s credit facilities emerged in the secondary market on Monday, with the $2.3 billion seven-year covenant-lite first-lien term loan seen at par 1/8 bid, par ½ offered, according to a market source.

Pricing on the term loan is Libor plus 375 basis points with a 25 bps step-down at 5 times total net leverage and a 0% Libor floor. The debt was sold at an original issue discount of 99.75 and has 101 soft call protection for six months.

On Friday, pricing on the term loan was reduced from talk in the range of Libor plus 400 bps to 425 bps, the step-down was added and the discount was tightened from 99.5.

The company’s $2,575,000,000 of first-lien credit facilities (B2/B) also include a $275 million revolver.

Credit Suisse Securities (USA) LLC, Nomura, Bank of America Merrill Lynch, BNP Paribas Securities Corp. and Ares are leading the deal.

Ultimate second-lien loan

Along with the first-lien credit facilities, Ultimate Software is getting a $900 million privately placed second-lien term loan that was committed by Ares and GSO.

Proceeds from the first-and second-lien credit facilities will be used with up to $8,133,000,000 of equity to fund the buyout of the company by an investor group led by Hellman & Friedman for $331.50 per share in cash, representing an aggregate value of about $11 billion.

The Hellman & Friedman-led investor group includes Blackstone, GIC, Canada Pension Plan Investment Board and JMI equity.

Closing is expected in mid-2019, subject to stockholder approval, regulatory approvals and other customary conditions.

Ultimate Software is a Weston, Fla.-based provider of human capital management solutions in the cloud.

NSO reworked

NSO Group lifted its six-year U.S. and euro term loan to $510 million equivalent from $500 million equivalent, and adjusted the original issue discount to 90 from revised talk of 94 and initial talk of 98, according to a market source.

In addition, the U.S. and euro tranche sizes were set, with the euro being €25 million and the U.S. being the remainder of the $510 million equivalent total, the source said. At launch, the loan was described as including at minimum a $300 million U.S. piece.

The term loan is priced at Libor/Euribor plus 700 bps with no step-downs and a 0% Libor floor, and has hard call protection of 102 in year one and 101 in year two.

Earlier in syndication, the spread on the term loan was raised from Libor/Euribor plus 600 bps, the call protection was modified from a 101 soft call for six months, the maturity was shortened from seven years and a first-lien net leverage covenant was added.

Allocations are targeted for Tuesday, the source added.

Jefferies LLC and Credit Suisse Securities (USA) LLC are leading the deal that will fund the buyout of the Luxembourg-based cyber-technology company by management and Novalpina Capital from Francisco Partners.

Staples retranches

Staples reduced its first-lien term loan size to $2.3 billion from $3.2 billion, and broke the debt up into a $300 million five-year tranche and a $2 billion seven-year tranche from one seven-year loan, a market source said.

Under the original structure, the term loan was talked at Libor plus 475 bps to 500 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months.

UBS Investment Bank, Goldman Sachs Bank USA, Bank of America Merrill Lynch, Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Jefferies LLC, KKR Capital Markets, Morgan Stanley Senior Funding Inc. and RBC Capital Markets are leading the loan that will be used with new notes and $77 million in ABL credit facilities borrowings to refinance existing debt, including $1 billion of bonds that are expected to be taken out at the make-whole provision under the existing indenture, and to fund a dividend payment.

The loan downsizing occurred when the company upsized its secured notes to $2,025,000,000 from $750 million and downsized its unsecured notes to $1 billion from $1,375,000,000, the source added.

Staples is a Framingham, Mass.-based business supplies distributor.

RadNet updates timing

RadNet moved up the commitment deadline for its fungible $100 million incremental term loan B due June 30, 2023 and the consent deadline for its amendment to noon ET on Wednesday from 5 p.m. ET on Thursday, a market source remarked.

Pricing on the incremental term loan is Libor plus 375 basis points, based on the company’s first-lien leverage ratio, with a 1% Libor floor.

Original issue discount talk on the incremental loan is 99.15.

Proceeds from the incremental loan will be used to repay revolver borrowings, fund cash to the balance sheet for potential future acquisitions and pay related fees and expenses.

As for the amendment, it would allow for increased flexibility for future strategic alternatives.

Lenders are being offered a 25 bps consent fee.

Barclays is leading the deal.

RadNet is a Los Angeles-based owner and operator of outpatient diagnostic imaging centers.

Barracuda accelerated

Barracuda Networks changed the commitment deadline for its fungible $205 million add-on senior secured first-lien term loan B (B2/B-/BB-) due February 2025 to 2:30 p.m. ET on Tuesday from Wednesday, according to a market source.

Also, allocations are expected on Tuesday, the source said.

Pricing on the add-on term loan is Libor plus 325 bps with a 1% Libor floor, in line with existing first-lien term loan pricing, and the new debt is talked with an original issue discount of 99 to 99.25.

The add-on term loan and the existing $551 million first-lien term loan B are getting 101 soft call protection for six months.

Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC and UBS Investment Bank are leading the deal that will be used to refinance an existing $205 million second-lien term loan due 2026.

Barracuda is a Campbell, Calif.-based provider of cloud-enabled security and data protection solutions.

Vizient discloses talk

Vizient held its lender call on Monday and announced talk on its $500 million seven-year term loan B at Libor plus 300 bps with a 0% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, a market source remarked.

The company’s $1.6 billion of senior secured credit facilities (Ba3/BB-) also include a $500 million revolver and a $600 million term loan A.

Commitments are due at 5 p.m. ET on April 17, the source added.

Barclays, Bank of America Merrill Lynch and J.P. Morgan Securities LLC are leading the deal that will be used with $300 million of unsecured debt to refinance existing indebtedness.

Vizient is an Irving, Tex.-based network of not-for-profit health care organizations.

Hexion reveals guidance

Hexion came out with talk of Libor plus 275 bps to 300 bps with a 0% Libor floor and an original issue discount of 99.5 on its $350 million 18-month debtor-in-possession term loan that launched with a morning bank meeting, a market source said.

The DIP term loan has 101 soft call protection for six months.

Commitments are due on April 17.

Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are leading the deal that will be used to repay outstanding ABL borrowings and for general corporate purposes.

Hexion is a Columbus, Ohio-based producer of thermoset resins and related technologies and specialty products.

Sundyne joins calendar

Sundyne set a lender call for 3 p.m. ET on Tuesday to launch a $450 million first-lien term loan, according to a market source.

Morgan Stanley Senior Funding Inc., Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA and RBC Capital Markets LLC are leading the deal that will be used to recapitalize the company and fund a distribution to shareholders.

Sundyne is an Arvada, Colo.-based designer and manufacturer of pumps and compressors.

Blackstone on deck

Blackstone Mortgage Trust scheduled a bank meeting for Tuesday to launch a $400 million seven-year senior secured term loan B (BB-) talked at Libor plus 250 bps to 275 bps with a 0% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months, a market source remarked.

Commitments are due at 5 p.m. ET on April 17, the source added.

J.P. Morgan Securities LLC is the left lead on the deal that will be used for general corporate purposes, including investment portfolio growth.

Blackstone Mortgage Trust is a New York-based real estate finance company.

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