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SunGard Prices Down, Receives Call Protection

Investors have received a tradeoff of 25 basis points on pricing for a year of soft call protection on the $4 billion term loan for SunGard Data Systems.

Investors have received a tradeoff of 25 basis points on pricing for a year of soft call protection on the $4 billion term loan for SunGard Data Systems. The deal backs the $11.4 billion buyout of the Wayne, Pa.-based integrated software and processing company by a consortium of private equity firms.

When the deal initially came to market, some investors were asking for call protection and possibly a limit on dividends (LMW, 7/8). However, with such a strong response, there was also a realization not all concessions would be met.

"It reflects where the market is," said one investor. "It is accepting, recognizing the deal was oversubscribed; people liked the deal," he added. "That certainly flies, I don't think we have a problem with that," said another investor about the changes.

The facility includes the $4 billion "B" loan, which has a $250 million U.K. tranche and a $250 million euro-denominated portion. It also includes a $1 billion revolver priced at LIBOR plus 2 1/2%. JPMorgan, Citigroup and Deutsche Bank are leading the loans.

The bonds for the deal also came to market last week with an additional $1 billion of 10-year senior subordinated notes priced at 10 1/4. The planned $2 billion of bonds also hit the market.

The deal included eight-year, $1.6 billion fixed rate bonds priced at 9 1/8, which is tighter than the price talk of 9 1/4, and eight-year, $400 million senior floating rate notes priced at LIBOR plus 4 1/2%. Deutsche Bank, Citigroup, JPMorgan, Morgan Stanley, Goldman Sachs and Bank of America are leading that deal.

The consortium acquiring SunGard include: Silver Lake Partners, Kohlberg Kravis Roberts & Co., Bain Capital, The Blackstone Group, Texas Pacific Group, Goldman Sachs Capital Partners and Providence Equity Partners. Calls to Michael Ruane, senior v.p. finance and cfo, were not returned nor were calls to a spokesman for Silver Lake.

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