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Ellucian downsizes bonds to $490 million, shifts $100 million to term loan
By Paul A. Harris
Portland, Ore., Sept. 18 – Dealers rejiggered the financing for the buyout of Ellucian (Sophia LP) on Friday, shifting $100 million of proceeds to the term loan B from the junk bond offer, according to a market source.
The financing is now coming in the form of an $1.56 billion seven-year covenant-light term loan B, upsized from $1.46 billion, and $490 million of eight-year senior notes (Caa2/CCC+) downsized from $590 million.
Bank of America Merrill Lynch, Morgan Stanley Senior Funding Inc., J.P. Morgan Securities LLC, Barclays, Jefferies Finance LLC, BMO Capital Markets Corp. and Deutsche Bank Securities Inc. are the leads on the loan.
As reported, price talk on the loan is Libor plus 375 basis points to 400 bps with a 1% Libor floor and an original issue discount of 99.5. The loan has 101 soft call protection for six months.
Ellucian's $1.71 billion credit facility (B2/B+), upsized from $1.61 billion, also features a $150 million five-year revolver.
For the downsized bond offer, Morgan Stanley & Co. LLC, BofA Merrill Lynch, J.P. Morgan Securities LLC, Barclays, BMO Capital Markets, Deutsche Bank Securities Inc. and Jefferies LLC are the joint bookrunners.
Price talk on the bonds, in the market via issuing entities Ensemble Merger Sub Inc. and Sophia Finance Inc., has yet to surface. However pricing is expected to widen substantially from early whispers in the low 8% context, market sources say.
Proceeds will be used fund the buyout of the company by TPG Capital and Leonard Green Partners from Hellman & Friedman and JMI Equity.
The issuer is a Fairfax, Va., provider of higher education software and services.
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