A Goldman Sachs-led arranger group has set final terms for the $206 million fungible add-on first-lien term loan and the $365 million second-lien term loan for Barracuda Networks, Inc. and the accompanying amendment for its existing $744 million first-lien term loan, according to sources. Re-commitments for the second-lien term loan are due by noon ET today, Oct. 22.
Pricing on the fungible add-on first-lien term loan and the existing covenant-lite first-lien term loan, both due February 2025, firmed at the tight end of guidance at L+375, with a 0.75% Libor floor with the add-on offered at an original issue discount, or OID, of 99 and the existing term loan offered at par. The first-lien term loan is currently priced at L+325, with a 1% Libor floor. The 101 soft call protection will be reset for six months on the entire tranche.
At talk, yield to maturity on the add-on term loan B is approximately 4.85%, while the yield to maturity on the existing term loan is roughly 4.58%.
The eight-year second-lien term loan finalized pricing tight to talk at L+675, with a 0.75% Libor floor and an OID of 99, from initial guidance of L+750-775, with a 0.75% Libor floor and an OID of 98.5. At revised terms, the yield to maturity is roughly 7.89%. The facility is covered by hard calls of 102 and 101 in years one and two, respectively.
Credit Suisse, UBS and Stone Point Capital Markets round out the arranger group.
Proceeds from the transaction will be used to issue a dividend to existing shareholders and add cash to the balance sheet for potential future acquisitions.
First-lien ratings have been affirmed at B-/B2 from S&P Global Ratings and Moody's, with a 3 recovery rating from S&P Global Ratings, and second-lien ratings of CCC+/Caa2 have been assigned from the two agencies, with a 5 recovery rating from S&P Global Ratings. Meanwhile, Fitch has downgraded its first-lien rating to B+, with a 2 recovery rating and assigned a second-lien rating of CCC, with a 6 recovery rating. Corporate ratings are B-/B3/B-, with stable outlooks from all three rating agencies.
Barracuda Networks, backed by Thoma Bravo, provides storage, network security and data protection services.