Veritas finalizes term debt sell-down by banks at discount of 85

By Sara Rosenberg

New York, June 15 – Veritas Technologies Corp. firmed the original issue discount on the sell-down of its term loan B-1 and term loan B-2 debt at 85, the wide end of revised talk in the 85 to 86 area and wide of earlier guidance ranging in the 88 to 90 area, according to a market source.

The banks were looking to sell $1,941,000,000 of the term loan B-1, $368 million of the term loan B-2 and €457,980,000 of the euro term loan B-1.

Upon closing a few months ago, the loans were structured as a $2,109,000,000 term loan B-1 priced at Libor plus 562.5 basis points with a 1% Libor floor, a $400 million second-out term loan B-2 priced at Libor plus 762.5 bps with a 1% Libor floor and a €497.3 million term loan B priced at Euribor plus 562.5 bps with a 1% floor.

Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., UBS Investment Bank, Jefferies Finance LLC, Barclays and Citigroup Global Markets Inc. were involved in the sell-down.

By late Tuesday, the U.S. term loan B-1 was seen quoted in the secondary market at 85½ bid, 86½ offered, the source added.

The company had first come to market in November 2015 with a $2.45 billion seven-year covenant-light term loan and a €760 million seven-year covenant-light term loan talked at Libor/Euribor plus 450 bps to 475 bps with a 1% floor and an original issue discount of 98 to 99.

During syndication, the U.S. term loan B was downsized to $1.5 billion from $2.45 billion, a separate $700 million senior secured term loan B held by the underwriters was added, price talk on the U.S. and euro term debt was increased to Libor/Euribor plus 500 bps and the original issue discount on the tranches widened to 95.

Then, later in November the decision was made to pull the loans from syndication due to unfavorable market conditions and to fund at the closing structure described above.

Proceeds from the debt were used to fund the buyout of the company by Carlyle Group from Symantec Corp.

Veritas is a Mountain View, Calif.-based provider of storage and server management software solutions.

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