15 Nov, 2021

UKG accelerates deadline for 1st-lien add-on, 2nd-lien term loan; adds repricing

UKG Inc. has accelerated the commitment deadline on its first- and second-lien term loan transaction to 5 p.m. ET on Wednesday, Nov. 17, from Nov. 18 previously, and will now reprice its existing $3.213 billion first-lien term loan alongside the $1 billion incremental first-lien term loan, according to sources.

The add-on first-lien term loan is still offered at an original issue discount of 99.5-99.75 and is fungible with the issuer's existing covenant-lite first-lien term loan due May 2026 that will now be repriced. The repricing is offered at par and the transaction looks to lower the Libor floor to 0.50%, from its current 0.75%, while the spread will remain at L+325. The 101 soft call protection will be reset for 6 months. At revised terms, yield to maturity is approximately 3.87%-3.93% for the add-on and 3.80% for the repriced tranche.

Price talk on the new $1.7 billion second-lien term loan due May 2027 is unchanged at L+575, with a 0.50% Libor floor and an original issue discount of 99.75. The facility will have a hard call of 102 for six months and then a hard call of 101 for the next 12 months. At guidance, yield to maturity is 6.46%.

Credit Suisse is left lead and administrative agent on the first-lien tranche, and Nomura is left lead and agent on the second-lien offering. BNP Paribas is a joint lead arranger on the deal.

Investors are being told to expect first-lien ratings of B-/B1 and second-lien ratings of CCC/Caa1, with respective recovery ratings of 3 and 6 from S&P Global Ratings. Corporate ratings will be B-/B2, with stable outlooks.

Proceeds from the deal will be used to refinance the company's existing second-lien term loan due May 2027 (L+675, 0.75% floor), to pre-fund three acquisition targets and to fund a cash distribution for future M&A and/or a dividend.

UKG, backed by Hellman & Friedman, is a provider of cloud-based human capital management solutions.

*Article updated at 7:46 a.m. on Nov. 16, 2021, to update arranger group.