CORRECTED-SunGard preps amendment to $4.24B credit to back spinoff

Tue Jan 28, 2014 5:12pm EST

(Recasts headline, corrects loan purpose)

By Natalie Wright

NEW YORK Jan 28 (Reuters) - Software and technology services company SunGard Data Systems Inc is preparing to launch Tuesday an amendment to $4.24 billion in loans to back the spinoff of SunGard's Availability Services business, sources told Thomson Reuters LPC.

The company is offering the amendment to investors at a lender call at 11 a.m. ET Tuesday, sources said.

The company is amending its $850 million revolver due March 2018, and $3.387 billion in term loan B tranches maturing in various years between 2014 to 2020.

JP Morgan leads the deal.

The amendment is in conjunction with SunGard's planned spinoff of the Availability Services segment, which provides disaster recovery, cloud services and IT consulting, as well as to make other changes to the credit agreement. The spinoff will be tax free.

The changes proposed would allow SunGard to effect the split-off without requiring an initial public offering, Availability Services to incur up to $1.5 billion of debt in connection with the split-off, and SunGard's secured net leverage, after giving pro forma effect to the split-off, to increase no more than 0.60 times of Adjusted Ebitda at the time of the separation, according to an SEC filing.

Representatives of JP Morgan and SunGard Data Systems did not return immediate calls for comment.

Current corporate family ratings are B2/B+, while facility ratings are Ba3/BB.

On January 24, SunGard Data Systems announced plans to spin off its Availability Services business to its existing stockholders, including its private equity owners. The spinoff is expected to be completed as early as the end of the first quarter of 2014.

SunGard Availability Services will be a separate business following the spinoff.

Both the resulting SunGard Data Systems stub and the spinoff SunGard Availability Services will continue to be principally owned by funds associated with Bain Capital Partners, The Blackstone Group, Goldman Sachs & Co., Kohlberg Kravis Roberts & Co., Providence Equity Partners, Silver Lake and TPG.

In March 2013, SunGard issued a $2.2 billion covenant-lite tranche E term loan maturing on March 8, 2020. The loan priced at LIB+300 with a 1 percent Libor floor. (Editing By Jon Methven)

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article