Syniverse term loans plummet following termination of merger with SPAC

Syniverse Technologies LLC announced today that its merger with special purpose acquisition company M3-Brigade Acquisition II Corp. has been terminated by mutual agreement, according to a filing, sending its existing term loans lower.

The merger, announced in August 2021, did not meet the conditions for closing after the rate of M3-Brigade Acquisition II Corp. stockholder redemptions for the proposed deal would have exceeded the threshold for closing.

The issuer had recently priced a $1 billion seven-year term loan B due 2029 (secured overnight financing rate+425, 0.50% floor) that was set to refinance the issuer's existing debt in connection with the merger. That financing, which sources say is expected to be unwound, was also set to include a $165 million revolving credit facility due 2027. Additional financing originally was supposed to include $265 million in private investment in public equity financing and $300 million of cash from M3-Brigade Acquisition II Corp. There was also a minimum commitment of $500 million and up to a maximum investment of $750 million from Twilio, which entered into a strategic partnership with Syniverse in March 2021.

The issuer's existing first-lien term loan due March 2023 (L+500, 1% Libor floor) slumped over 2 points today following the announcement, to a 97.5/98.5 level. The company also has a second-lien term loan due March 2024 (L+900, 1% Libor floor) that dropped from a 99.5/100.25 level to a 93 bid context today.

M3-Brigade Acquisition II Corp. CEO Mohsin Meghji said in the announcement, "We are disappointed that recent changes in market conditions made it impossible to consummate our proposed merger, but Syniverse is a great company with a strong management team and we are confident that it has a very bright future."

Tampa, Fla.-based Syniverse, currently backed by The Carlyle Group, provides interoperability and network services for wireless telecommunications carriers.