McAfee lifts U.S. and euro term loans to $6.66 billion equivalent

By Sara Rosenberg

New York, Feb. 2 – McAfee Corp. upsized its term loans to $6.66 billion from $5.66 billion equivalent and canceled plans for a $1 billion secured notes offering, according to a market source.

The split of the amount being added to the U.S. term loan and to the euro term loan is not yet available. At launch, the U.S. seven-year term loan B was sized at $4.41 billion and the euro seven-year term loan B was sized at $1.25 billion equivalent.

Price talk on the U.S. term loan is SOFR+10 basis points CSA plus 375 bps to 400 bps with two 25 bps step-downs based on first-lien net leverage and a 25 bps initial public offering-based step-down, a 0.5% floor and an original issue discount of 99.5, and talk on the euro term loan is Euribor plus 400 bps to 425 bps with three 25 bps step-downs based on first-lien net leverage and a 25 bps initial public offering-based step-down, a 0% floor and a discount of 99.5.

Both term loans have 101 soft call protection for six months.

The company’s now $7.66 billion of credit facilities (B2/B-), up from $6.66 billion, also include a $1 billion revolver.

JPMorgan Chase Bank, BofA Securities Inc., Credit Suisse, Barclays, Citigroup Global Markets Inc., HSBC Securities, RBC Capital Markets, UBS Investment Bank, BMO Capital Markets, KKR Capital Markets, Macquarie Capital, Mizuho, MUFG, Nomura, Wells Fargo Securities LLC, BNP Paribas Securities Corp., CIBC, Citizens, Credit Agricole, Fifth Third, Intesa Sanpaolo, KeyBanc Capital Markets, Natixis, Societe Generale, Standard Chartered, Stifel, SMBC, TD Securities and Bank of Nova Scotia are the leads on the deal.

Commitments continued to be due at noon ET on Wednesday, the source added.

Proceeds will be used to help fund the buyout of the company by an investor group led by Advent International Corp., Permira Advisers LLC, Crosspoint Capital Partners, Canada Pension Plan Investment Board, GIC Private Ltd. and Abu Dhabi Investment Authority for $26.00 per share in an all-cash transaction valued at about $12 billion on an equity value basis, and over $14 billion on an enterprise value basis after giving effect to repayment of McAfee debt.

Other funds for the transaction will come from $2.32 billion of senior notes, a preferred stock offering and equity.

Closing is expected in the first half of this year, subject to customary conditions, including approval by McAfee shareholders, receipt of regulatory approvals, and clearance by the Committee on Foreign Investment in the U.S.

McAfee is a San Jose, Calif.-based provider of online protection for consumers.

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