(Recasts headline, corrects loan purpose)
By Natalie Wright
NEW YORK Jan 28 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)