Citrix raises price talk to 10% for $4B of LBO bonds

Citrix Systems has revised price talk for its $4 billion offering of 6.5-year (non-call three) senior secured notes to 10%, or an OID of 83.561, versus previous talk at 9.50%–9.75% (OID: 85.695–84.620), according to market sources. Reconfirmations are due by 1 p.m. ET today, and the Credit Suisse-led deal is slated for pricing thereafter. It is the largest high-yield bond offering since the LBO-driven Medline Industries print in September 2021.

The initial talk for the offering came alongside an array of documentation changes, including lower leveraged ratio covenants, sources noted. Other changes were noted for covenants governing the restricted payments basket, permitted investments and asset sales. In addition, the calculations for addbacks were amended, and the "look forward" period was shortened.

The notes will be via issuing entity Picard Midco Inc., The transaction features a first call at par plus 50% of the coupon rate, an up-to-40% equity clawback for the first three years and a change-of-control put provision at 101. Bookrunners also include BofA, Goldman Sachs, Barclays, Citi, Deutsche Bank, KKR, Mizuho, Morgan Stanley, RBC Capital Markets, Apollo, Jefferies, BMO, BNP, Guggenheim, HSBC, Macquarie, Nomura, Truist, UBS, Wells Fargo, Keybank, MUFG, Scotiabank, Societe Generale, Stifel, SPC, TD, FITB, ING, IMI, Natixis, Santander and US Bancorp.

Citrix on Sept. 19 also updated terms on its $4.05 billion term loan B and $500 million-equivalent euro-denominated term loan B, extending the 101 soft call protection to 12 months, from six months previously, according to sources.

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 was backed by a $16 billion debt financing commitment. Citrix shareholders approved the $104-per-share in cash offer in April and the transaction has received all regulatory approvals. Closing is expected in the last week of September.

Proceeds of the proposed bond offering — together with the proceeds of the issuance of the second-lien debt, borrowings under new senior secured credit facilities, the proceeds of a preferred stock offering and equity contributions from funds affiliated with the investors — will be used to pay the cash consideration for the merger; to finance the repayment of substantially all of Citrix’s and Tibco's existing outstanding indebtedness; to pay any related premiums, fees and expenses; and for general corporate purposes.

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.

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This article originally appeared on PitchBook News