Bloomberg News

BMC Software Reduces LBO Loans to $3.5 Billion From $4.2 Billion

August 07, 2013

BMC Software Inc. (BMC:US) reduced the amount of two loans it’s seeking for its leveraged buyout led by Bain Capital LLC to about $3.5 billion from $4.2 billion, according to a person with knowledge of the transaction.

The provider of software for corporate computer networks cut a $3.2 billion term loan to $2.88 billion and a 750 million-euro ($1 billion) portion was reduced to 500 million euros, said the person, who asked not to be identified because terms of the deal are private.

BMC agreed to be taken private by a group that includes Bain and Golden Gate Capital in a $6.9 billion deal, after struggling to compete with newcomers better equipped to handle the shift toward cloud computing.

The $2.88 billion term loan will pay interest at 4 percentage points more than the London interbank offered rate, with a 1 percent floor on the lending benchmark, the person said. The spread on the euro portion will be 4.5 percentage points more than Euribor.

The Houston-based company proposed selling both pieces to investors at a discount of 99 percent of face value, said the person. Discounts reduce proceeds for the borrower and boost the yield for investors.

Credit Suisse Group AG is arranging the LBO financing and lenders are asked to let the bank know by 5 p.m. whether they will participate in the deal.

BMC also increased its sale of dollar-denominated bonds backing the buyout to $1.63 billion from $1.38 billion, after yesterday scrapping plans for a 250 million-euro portion of the sale, according to data compiled by Bloomberg.

To contact the reporter on this story: Christine Idzelis in New York at cidzelis@bloomberg.net

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


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