Citrix offers deep discount to wrap $4.55B bellwether leveraged loan backing LBO

Citrix Systems on Sept. 20 priced and allocated its $4.55 billion-equivalent cross-border buyout leveraged loan, split between a $4.05 billion tranche that priced at Sofr+CSA+450, with a 0.5% floor and an original-issue discount of 91 cents on the dollar, and a $500 million-equivalent euro-denominated TLB at E+450, with a 0% floor at 91. BofA Securities, Credit Suisse and Goldman Sachs led the arranger group.

Final pricing is in line with initial margin and floor talk on both the dollars and euros, and compares with initial OID guidance of 92, that was then revised to 91-92 yesterday on both tranches. Terms suggest a yield of 9.91% on the dollar portion and 7.57% on the euros. As of earlier this month the average yield to maturity for a single-B rated credit was 8.46%, according to LCD. Citrix is rated B/B3.

The borrower also went out with revisions on Monday that tightened docs and extended soft-call protection to 12 months, from six. The CSA on the dollars is 10 bps.

Vista Equity and Evergreen Coast Capital, an affiliate of Elliott Investment Management, are acquiring enterprise software firm Citrix for $16.5 billion, including debt, and will merge the business with existing Vista portfolio company Tibco Software. The total transaction is valued at around $24 billion, according to Moody’s, and closing is expected in the last week of September.

Additional financing for the transaction includes a $4 billion issue of 6.5-year (non-call three) senior secured notes and a $3.95 billion second-lien term loan bridge facility, with the balance in the form of a $2.5 billion term loan A. The company will also have a $1 billion, five-year revolver with a springing net first-lien leverage covenant. In addition to the debt financing, funding for the transaction will come from $2.5 billion of PIK preferred equity and rollover equity.

First-lien issue-level ratings came in at B/B2, with a 3 recovery rating from S&P Global Ratings, and Moody’s assigned a Caa2 rating to the second-lien debt. Issuer ratings are B/B3, with stable outlooks. Picard Midco Inc. is the borrower.

Citrix Systems is an enterprise software company that provides workspace, app delivery and security, and professional services worldwide. Tibco Software is a global provider of infrastructure and business intelligence software.

Terms:

Borrower	Tibco Software Inc, Picard Parent
Issue	$4.05 billion term loan
Spread	SOFR+CSA+450
Floor	0.50%
Price	91
Maturity	6.5 years
YTM	9.91%
Call protection	101 soft-call for 12 months
Corporate rating	B/B3
Facility rating	B/B2
Recovery rating	3
Arrangers	BofA, CS, GS, others
Price talk	SOFR+CSA+450 at 92 then 91-92
Borrower	Tibco Software Inc, Picard Parent
Issue	$500M equiv. euro TLB
Spread	E+450
Floor	0%
Price	91
Maturity	6.5 years
YTM	7.57%
Call protection	101 soft-call for 12 months
Corporate rating	B/B3
Facility rating	B/B2
Recovery rating	3
Arrangers	BofA, CS, GS, others
Price talk	E+450 at 92 then 91-92

 

This article originally appeared on PitchBook News