Conduent launches $840 million term loan B at Libor plus 225-250 bps

By Sara Rosenberg

New York, June 6 – Conduent Business Services LLC launched on its lender call on Wednesday an $840 million term loan B due Dec. 7, 2023 that is talked at Libor plus 225 basis points to 250 bps with a 0% Libor floor and a par issue price, according to a market source.

The term loan B has 101 soft call protection for six months, the source said.

Amortization on the term loan B is 1% per annum.

Included in the loan is a maximum total net leverage ratio covenant of 4.25 times through Dec. 31, stepping down to 3.75 times thereafter.

Proceeds will be used to reprice an existing term loan B due Dec. 7, 2023 down from Libor plus 300 bps with a 0% Libor floor.

The company also launched a repricing of its $750 million revolver and $728 million term loan A (of which $314 million is denominated in euros) to Libor/Euribor plus 175 bps from Libor/Euribor plus 225 bps and is asking to extend the maturities of these tranches by one year to Dec. 7, 2022.

Revolver and term loan A lenders are being offered a 10 bps extension fee.

Also, Conduent is requesting to revise term loan A amortization starting March 31, 2019 to 5%, 5%, 10% and 10% per annum from 0%, 7.5%, 7.5%, 10% and 15% per annum.

In addition, the company is seeking an amendment to permit the application of proceeds from divestitures of non-core assets to any of its existing debt rather than to term loan A and term loan B borrowings provided that total net leverage is no worse than immediately prior to the applicable disposition and proceeds are applied within three months after receipt.

Furthermore, the amendment would refresh the free and clear basket in the incremental to the original $300 million from the $200 million currently remaining, and add the ability to incur term loan A debt under the free and clear basket with a maturity date no shorter than the existing term loan A instead of requiring that the maturity of all incremental facilities be longer than the term loan B.

Citigroup Global Markets Inc. is the lead bank on the senior secured deal. J.P. Morgan Securities LLC is the administrative agent.

Commitments/consents are due at noon ET on June 20, the source added.

Closing is expected in late June.

Conduent is a Florham Park, N.J.-based provider of business process services with expertise in transaction-intensive processing, analytics and automation.

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