IFS sets lender call for SEK11.8B cross-border term loan recap

Swedish enterprise software group IFS is out to market with an SEK11.8 billion-equivalent, euro- and dollar-denominated term loan recap ahead of a global investor call at 2 p.m. GMT/9 a.m. ET on March 11. J.P. Morgan (U.S. dollar physical) and Morgan Stanley (euro physical) are leading a group as lead global coordinators, and replies on the deal are due by 5 p.m. GMT/5 p.m. ET on March 22.

Ahead of the call, the seven-year deal is outlined as follows:

• €520 million term loan at E+400, 0% floor, 99.5
• $720 million term loan at L+400, 0.5% floor, 99.5
• €67 million term loan at E+400, 0% floor, 99.5

Price talk suggests a yield of 4.15% on the euros and 4.67% on the dollars. The euro margins are subject a three-step ratchet of 25 basis points at 0.25x while the dollars have two step-downs of 25 bps at 0.25x. All term loans come with six months of soft-call protection at 101, and updated ratings will follow. IGT Holding IV is the borrowing entity.

BofA Securities, Credit Agricole CIB, Goldman Sachs, Mizuho, Nordea, SEB and SMBC make up the joint bookrunner group.

Proceeds refinance debt and fund a dividend. The deal comes after a shareholder reorganization announced in June 2020 that saw EQT's VIII and IX funds, together with TA Associates, take control of IFS from EQT's VII fund in a deal valued at more than €3 billion. As the transaction saw TA take a minority stake in IFS it did not trigger change-of-control clauses in the firm's senior debt financing, though a separate holdco PIK financing was understood to have been repaid. MV Credit was understood to be the lender on the holdco debt, which was said to have stood at SEK1.38 billion as of June 2019.

EQT first invested in IFS in 2015, in a buyout funded through a club of bank lenders. The firm then moved on to an institutional footing in mid-2017, via a cross-border financing that was subsequently increased twice and repriced. At the time of the most recent add-on, this left the euro loan priced at E+375 with a 0% floor and the dollars at L+400 also with a 0% floor. In secondary the euro loan was quoted in a 99.625/100.500 context at the start of the week, though it looks to have softened a little to bracket par earlier today.

Industrial and Financial Systems, IFS AB (publ) develops enterprise software with a focus on five verticals, namely manufacturing, aerospace and defense, energy and utilities, services companies, and construction.