Quest Software wraps $2.81B 1st-lien, $765M 2nd-lien term loans for LBO; terms

Quest Software Inc. has completed its $2.81 billion first-lien and $765 million second-lien term loans that will be used to back the buyout of the company by Clearlake Capital, according to sources. The seven-year first-lien term loan priced at a spread of 425 basis points over the secured overnight financing rate plus a credit spread adjustment, or CSA, with a 0.5% floor and an original issue discount of 99. There is a 25-bps margin step-down upon an IPO, and a 25-bps step-down at 0.5x inside closing first-lien net leverage was dropped.

The eight-year, second-lien term loan cleared at a spread of 750 bps over Sofr plus a CSA, with a 0.5% floor and an OID of 98.5.

Goldman Sachs was left lead arranger on the first-lien tranche, while Morgan Stanley was left lead on the second-lien tranche. The credit spread adjustment on both tranches is 10 bps for a one-month rate, 15 bps for a three-month rate and 25 bps for a six-month rate, and were added after the deal launched initially with no CSA. Financing also includes a $400 million revolving credit facility due 2027. Quest Software provides integrated infrastructure software for managing systems, data and applications.

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