Citrix Offers Deep Discount to Close $4.55 Billion LBO on Leveraged Loan

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

The final price is in line with initial margin and floor speech on the dollar and euro, and compares to the initial OID guidance of 92, which was later revised to 91-92 yesterday on both tranches . The terms suggest a return of 9.91% on the dollar side and 7.57% on the euro. At the start of the month, the average yield to maturity of a single B-rated credit was 8.46%, according to LCD. Citrix is ​​rated B/B3.

The borrower also issued revisions on Monday that tightened documents and extended temporary call protection to 12 months from six. The CSA on the dollar is 10 bps.

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

Additional financing for the transaction includes a $4 billion issuance of 6.5-year senior secured notes (three-year non-repayable) and a $3.95 billion junior term bridging credit facility. , the balance in the form of a term loan A of 2.5 billion dollars. The company will also have a five-year, $1 billion revolver with a first-tier net leverage clause. In addition to debt financing, financing for the transaction will come from $2.5 billion of PIK preferred stock and rollover stock.

Senior issue ratings reached B/B2, with a recovery rating of 3 from S&P Global Ratings, and Moody’s assigned a Caa2 rating to junior debt. Issuer ratings are B/B3, with a stable outlook. Picard Midco Inc. is the borrower.

Citrix Systems is an enterprise software company that provides workspaces, application 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
Publish $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
Company rating B/B3
Installation assessment B/B2
Recovery rate 3
Arrangers BofA, CS, GS, others
talk about price SOFR+CSA+450 to 92 then 91-92
Borrower Tibco Software Inc, Picard Parent
Publish $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
Company rating B/B3
Installation assessment B/B2
Recovery rate 3
Arrangers BofA, CS, GS, others
talk about price E+450 at 92 then 91-92

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