By Paul A. Harris
Portland, Ore., Nov. 21 – Genesys Telecommunications Laboratories, Inc. priced its $700 million issue of eight-year senior notes (Caa2/CCC) at par to yield 10% on Monday, according to a syndicate source.
The yield came at the tight end of the 10% to 10¼% yield talk.
There were numerous covenant changes.
They included an increase in the call premiums. The first call premium increases to 75% from 50%, the second premium to 50% from 25%, and the third premium to 25% from par. Under the revised call structure the notes become callable after year four at par. The non-call period remains unchanged at three years.
The debt covenant ratio basket is revised to either 5.75 times total net leverage from 6 times or 2 times the fixed charge coverage ratio.
The debt covenant credit agreement basket is revised reduce the threshold for incremental capacity to 4 times secured net leverage rom 4.6 times, and the incremental starter credit facilities basket is reduced to $350 million with no grower concept from $460 million or 100% of last 12 months EBITDA.
The debt and liens covenants’ general basket is revised to the greater of $130 million and 27.5% of consolidated EBITDA from $165 million and 35% of last 12 months EBITDA.
The liens covenant ratio liens capacity is revised to 4 times secured net leverage from 4.6 times.
The restricted payments basket consolidated net income builder is revised to remove the cumulative deferred revenue builder; the previous cumulative deferred revenue builder was 50% of deferred revenue. In addition the starter is reduced to $75 million, with no grower concept, from $165 million and 35% of last 12 months EBITDA.
The restricted payments unlimited restricted payments ratio test for unlimited restricted payments is reduced to 3.75 times total net leverage from 4.75 times.
The permitted investments ratio basket for unlimited investments to is reduced to 4 times total net leverage from 4.75 times.
The restricted payments general basket is reduced to the greater of $100 million and 20% of consolidated EBITDA from $125 million and 25% of last 12 months EBITDA.
Goldman Sachs & Co. is the left bookrunner for the Rule 144A and Regulation S for life offering. BofA Merrill Lynch, Citigroup Global Markets Inc. and RBC Capital Markets are the joint bookrunners.
Proceeds, together with proceeds from a new credit facility, will be used to fund the acquisition of Interactive Intelligence Group, Inc., as well as for general corporate purposes, including debt repayment.
Genesys is a San Francisco-based provider of omnichannel customer experience and contact center solutions. Interactive Intelligence is an Indianapolis-based provider of cloud and on-premise solutions for customer engagement, communications and collaboration.
| Issuer: | Genesys Telecommunications Laboratories, Inc.
|
| Amount: | $700 million
|
| Maturity: | Nov. 30, 2024
|
| Securities: | Senior notes
|
| Left bookrunner: | Goldman Sachs
|
| Joint bookrunners: | BofA Merrill Lynch, Citigroup Global Markets Inc., RBC Capital Markets
|
| Coupon: | 10%
|
| Price: | Par
|
| Yield: | 10%
|
| Spread: | 777 bps
|
| Call: | Make-whole call at Treasuries plus 50 bps until Nov. 30, 2019, then callable at 107.5
|
| Equity clawback: | 40% at 110 until Nov. 30, 2019
|
| Trade date: | Nov. 21
|
| Settlement date: | Dec. 1
|
| Ratings: | Moody's: Caa2
|
| S&P: CCC
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 10% to 10¼%
|
| Marketing: | Roadshow
|
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