Bloomberg News

Datatel Sets Rate on $1.195 Billion of Acquisition Loans

December 07, 2011

(Updates with buyout details in seventh paragraph.)

Dec. 6 (Bloomberg) -- Datatel Inc., the software company owned by Hellman & Friedman LLC, set the interest rate on $1.195 billion of loans it’s seeking to finance its acquisition of SunGard Higher Education, according to a person with knowledge of the transaction.

A $1.07 billion term loan B due in 2018, will pay 5 percentage points more than the London interbank offered rate, said the person, who declined to be identified because the terms are private. Libor, a rate banks charge to lend to each other, will have a 1.25 percent floor.

Datatel is proposing to sell the loan at 98 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.

Lenders are being offered one-year soft-call protection of 101 cents, meaning Datatel would have to pay 1 cent more than face value to refinance the debt during the first year, the person said.

The Fairfax, Virginia-based company is also seeking a $125 million revolving line of credit due in five years that will pay 4.75 percentage points more than Libor, the person said.

Bank of America Corp., Barclays Plc, Citigroup Inc., Credit Suisse Group AG and JPMorgan Chase & Co. are arranging the financing and lenders must submit commitments by Dec. 14. The deal is expected to close and fund in the second quarter of 2012 subject to regulatory approval.

Hellman & Friedman will acquire the SunGard Higher Education businesses from SunGard Data Systems Inc. for $1.775 billion and combine them with Datatel, according to an Aug. 5 statement distributed by Business Wire. Hellman & Friedman purchased Datatel from a Thoma Bravo-led group of investors in 2009.

Mary Beth Grover, a spokeswoman for Hellman & Friedman, declined to comment.

A term loan B is sold mainly to non-bank lenders such as collateralized loan obligations, bank loan mutual funds and hedge funds. In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.

--Editor: Faris Khan

To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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