Oversubscription led to structural and pricing tweaks in the $2.485 billion financing for Reynolds and Reynolds, originally launched Sept. 20. Deutsche Bank and Credit Suisse sliced $155 million off the third lien and tacked it onto the first-lien term loan, according to a banker. All other tranches remained the same. Pricing was cut by 25 basis points on the first lien, with a step down based on leverage.
The deal now consists of a $75 million revolver, a $1.640 billion first-lien term loan, a $520 million second-lien term loan and a $250 million third-lien term loan. The revolver and first lien are now priced at LIBOR plus 2 1/2%, with a step down to LIBOR plus 2 1/4% when leverage is less than 4.75 times. It was originally talked at LIBOR plus 2 3/4%. Pricing on the second lien remained at LIBOR plus 5 1/2% and pricing on the third lien bumped up 50 basis points to LIBOR plus 7 1/2% (CIN, 9/29). An investor said the deal was well oversubscribed, which led to the money movement.
The credit is being used by Reynolds to back its $2.8 billion acquisition of Universal Computer Systems (9/29). At launch, Standard & Poor's downgraded the company's corporate credit rating four notches from BBB to B+, but removed it from CreditWatch with negative implications, where it was placed Aug. 9. The ratings agency assigned a BB- with a recovery rating of 1 to the first lien, a B with a recovery rating of 3 to the second lien, and a B- with a 5 recovery rating to the third lien.
UCS is a provider of comprehensive solutions for computing and business needs of automobile dealerships. Reynolds and Reynolds is a provider of dealership management solutions, e-learning and consulting services (9/29). Calls to a UCS representative were not returned. A Reynolds and Reynolds spokesman referred calls to the company's 8-K filings with the Securities and Exchange Commission and declined further comment.