Cloud Software Group pitches 2nd-lien secured bonds to target Citrix debt

Cloud Software Group (f/k/a Tibco Software) is offering $3.838 billion of 6.5-year, 9% senior secured second-lien notes to repay existing second-lien debt used to back the buyout of Citrix. A global investor call for the Goldman Sachs-led offering was held today, and pricing for the tranche is expected tomorrow, according to market sources.

Vista Equity and Evergreen Coast Capital, an affiliate of Elliott Investment Management, last year acquired enterprise software firm Citrix for $16.5 billion, including debt. Financing included a $4.55 billion cross-border term loan, a $4 billion issue of 6.5-year, 6.5% senior secured notes due 2029 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.

Proceeds of the current bond deal will be combined with $76.8 million of cash on hand to repurchase or prepay all loans outstanding under the second-lien bridge. Citrix in January also priced a €250 million non-fungible March 2029 term loan B add-on to refinance a portion of the group’s term loan A.

For reference, Citrix was last in the bond market in September 2022 when it priced its jumbo LBO package that included the 6.5% senior secured notes due 2029, issued via Tibco, at an OID of 83.561 to yield 10%. Those bonds have clawed their way up from a March 15 nadir of 83.625 to 88.375 this morning as buyers stepped in to extend last week’s two-point gain by another point. A broad-market rally pushed the bonds to a Feb. 2 high of 91.375 that remains the top trade.

Meanwhile, the proposed bonds are non-callable through Sept. 30, 2025, with a first call at par plus 50% of the coupon. Additional structural details include a change-of-control put at 101%, and an up-to-40% equity claw at 109% during the non-call period.

The full bookrunner group also includes BofA Securities, Credit Suisse, Barclays, Citi, Deutsche Bank, KKR Capital Markets, Mizuho, Morgan Stanley, RBC Capital Markets, BMO Capital Markets, Macquarie, BNP Paribas, Jefferies, Guggenheim, HSBC, Nomura, Truist, UBS, Wells Fargo, Apollo, KeyBanc, MUFG, Scotiabank, Societe Generale, SPC Capital Markets, TD Securities, Fifth Third, ING, Intesa Sanpaolo, Natixis, Santander, and US Bancorp.

This article originally appeared on PitchBook News