U.K. financial software provider Misys has launched a jumbo US$5.7 billion-equivalent financing backing its merger with Canadian fintech company DH Corp, banking sources said.
The deal will bring much-desired supply to the loan market on both sides of the Atlantic during a period of subdued new issuance and rampant re-pricings.
The company is seeking US$4.6 billion-equivalent of first-lien debt split between a seven-year US$3.12 billion dollar-denominated term loan, a seven-year €1 billion euro-denominated term loan and a five-year US$400 million multi-currency revolver.
The dollar term loan is guided at 350 bp to 375 bp over Libor with a 1 percent floor while the euro term loan is guided at 400 bp to 425 bp over Euribor with a 0 percent floor. Both tranches are offered with an OID of 99-99.5.
The revolver, which includes a springing net leverage ratio, is guided at 350 bp to 375 bp over Libor with a 0 percent floor at par. It also includes a 50 bp undrawn fee subject to two leveraged-based step downs of 25 bp on the pricing margin at 4.25 times and 3.75 times first-lien net leverage.
The first-lien debt will amortise at 1 percent per annum with the balance at maturity.
A US$1.15 billion-equivalent eight-year second-lien portion of the financing is split between an US$850 million term loan guided at 775 bp to 800 bp over Libor and an €280 million term loan guided at 725 bp to 750 bp over Euribor.
Both tranches include 1 percent floors and are guided with an OID of 98.5.
U.S. private equity firm Vista Equity Partners said in March it would buy Toronto-based DH Corp for $4.8 billion and combine it with Misys, which abandoned plans to list on the London stock market in October 2016, blaming shaky market conditions.
Reuters reported in March that banks had underwritten around US$6 billion of debt financing to back Vista’s acquisition of DH Corp and to refinance existing debt as it combines the company with Misys.
Morgan Stanley, Citigroup, Barclays, Macquarie and Nomura are joint lead arrangers.
Morgan Stanley leads the dollar first-lien, Citigroup leads the euro first-lien and Barclays leads the dollar and euro second-lien. Morgan Stanley is also administrative agent.
Commitments are due on Wednesday, May 3. The borrowers are Almonde Inc, Tahoe Canada Bidco, and Misys Europe SA.
By Hannah Brenton (Editing by Christopher Mangham)
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