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Computer Sciences shifting some funds to pro rata tranches from term B
By Sara Rosenberg
New York, Oct. 27 – Computer Sciences Government Services Inc. is reducing its seven-year covenant-light term loan B to a maximum size of $1 billion from $1.25 billion and will upsize its pro rata tranches by the equivalent amount that the term loan B is downsized, according to a market source.
The new tranche sizes are not yet available, the source said.
At launch, the pro rata debt consisted of a $500 million five-year revolver, a $500 million three-year term loan A-1 and a $1.25 billion five-year term loan A-2.
Talk on the term loan B is still Libor plus 300 basis points to 325 bps with a 0.75% Libor floor, an original issue discount of 99.5 and 101 soft call protection for six months.
Price talk on the revolver and term loan A-2 is still Libor plus 175 bps and talk on the term loan A-1 is still Libor plus 162.5 bps.
Commitments are due at 5 p.m. ET on Wednesday, accelerated from Thursday, the source added.
Allocations are expected to follow shortly thereafter.
RBC Capital Markets LLC, Mitsubishi UFJ Financial Group, Bank of America Merrill Lynch and Scotiabank are the bookrunners on the $3.5 billion senior secured credit facility (Ba2/BB+/BBB), with RBC left lead on the term loan B and Mitsubishi left lead on the revolver and term A debt.
Proceeds will be used to fund the $10.50 per share special cash dividend being paid in the spinoff of Computer Sciences Government Services from Computer Sciences Corp., to finance the $390 million acquisition of SRA by Computer Sciences Government Services from Providence Equity Partners and SRA’s founder, Ernst Volgenau, as well as members of its management team, and to refinance SRA’s existing $1 billion of net debt.
Computer Sciences Government Services is a Falls Church, Va., provider of IT services to the U.S. federal government. SRA is a Fairfax, Va.-based provider of IT and professional services to the U.S. federal government.
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