Constant Contact firms $850 million term loan at Libor plus 400 bps

By Sara Rosenberg

New York, March 11 – Constant Contact Inc. finalized pricing on its $850 million seven-year covenant-lite first-lien term loan (B2/B/BB-) at Libor plus 400 basis points, the high end of the Libor plus 375 bps to 400 bps talk, according to a market source.

The term loan still has a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.

Of the total term loan amount, $180 million is delayed-draw and has a ticking fee of half the spread from days 46 to 75 and the full spread thereafter.

Regarding documentation, MFN was revised to reduce it to 50 bps, remove the sunset, and remove carve-outs for incurrences that are not broadly syndicated term loans, that are not floating rate, that are not incurred under the ratio-based incremental amount, that mature after the initial term loans, that are incurred in connection with a permitted acquisition/investment and that are in an amount up to the greater of $364 million/200% of EBITDA in aggregate.

Also, under the accordion, the “no worse” prong was removed, the interest coverage ratio prong for junior debt incurrence was removed and conforming changes were made to debt negative covenant, the source continued.

In addition, all asset-sale step-downs under asset sale were removed, a provision was added under the Chewy protection requiring that release of a guarantor solely as a result of such guarantor ceasing to be a wholly owned restricted subsidiary will only be permitted if the primary purpose of applicable transaction was not to evade the guarantee required, the J. Crew blocker language was modified to remove the carve-outs, and quarterly lender calls are now required at all times.

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, BofA Securities Inc., Barclays, Jefferies LLC, UBS Investment Bank, BNP Paribas Securities Corp., CPPIB, KKR Capital Markets, Antares Capital and CBAM are the bookrunners on the deal.

Proceeds will be used to fund Clearlake Capital Group LP’s and Siris Capital Group LLC’s spin out of the company from Endurance International Group Holdings Inc. into a stand-alone enterprise.

Constant Contact is a Waltham, Mass.-based digital marketing company.

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