Rocket Software updates first-, second-lien term loan sizes, pricing

By Sara Rosenberg

New York, Oct. 7 – Rocket Software Inc. upsized its seven-year covenant-light first-lien term loan to $675 million from $630 million and downsized its eight-year covenant-light second-lien term loan to $195 million from $215 million, according to a market source.

Also, pricing on the first-lien term loan was lowered to Libor plus 425 basis points from talk of Libor plus 450 bps to 475 bps, and pricing on the second-lien term loan was set at Libor plus 950 bps, the high end of the Libor plus 925 bps to 950 bps talk, the source said.

The first-lien term loan still has a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months, and the second-lien term loan still has a 1% Libor floor, a discount of 98 and call protection of 102 in year one and 101 in year two.

The company’s now $905 million credit facility, up from $880 million, also includes a $35 million revolver.

Credit Suisse Securities (USA) LLC and Morgan Stanley Senior Funding Inc. are the lead banks on the deal.

Proceeds will be used to refinance existing debt, to pay a shareholder distribution and to finance an acquisition.

Recommitments were scheduled to be due at 3 p.m. ET on Friday, the source added.

Rocket Software is a Waltham, Mass.-based software development firm.

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