Renaissance Learning finalizes pricing for 1st-lien, 2nd-lien term loans

A Barclays-led arranger group has set final terms on the $358 million first-lien and $135 million second-lien incremental covenant-lite term loans for Renaissance Learning Inc., according to sources. Commitments are due by 5 p.m. ET today.

The incremental first-lien term loan firmed at L+325, with a 0% Libor floor and an original issues discount, or OID, of 99.03, and will now be fungible with the issuer's existing first-lien term loan due May 2025 (L+325, 0% Libor floor). Lenders are offered six months of 101 soft call protection. At final terms, yield to maturity is approximately 3.74%.

Price talk for the fungible add-on to the second-lien term loan due 2026 (L+700, 0% Libor floor) finalized tight of talk at an OID of 99.25. At final terms, the yield to maturity is roughly 7.56%.

Jefferies, Nomura, Macquarie, BMO Capital Markets and Madison Capital are joint bookrunners on the deal.

First-lien facility ratings are B-/B2, with a 3 recovery rating from S&P Global Ratings. The second-lien is rated CCC/Caa2 with a recovery rating of 6. Corporate ratings are B-/B3, with stable outlooks, and Renaissance Holding Corp. is the borrower.

Proceeds from the deal will be used to finance the company's acquisition of Nearpod. In addition to the debt financing, the $650 million acquisition will be funded with $175 million of sponsor equity, ratings agencies note.

Also, the company is increasing its revolver to $140 million, from $80 million.

Renaissance placed the existing term loans in May 2018 to finance the buyout of the company by Francisco Partners.

Renaissance Learning is a provider of software solutions for assessment, teaching and learning to K-12 schools and districts.