UKG returns with $1B incremental 1st-lien, new $1.7B 2nd-lien term loans

UKG Inc. is returning to market to issue a $1 billion incremental first-lien term loan and a new $1.7 billion second-lien term loan, according to sources. A lender call is scheduled for today at 2 p.m. ET and commitments are due by 5 p.m. ET on Thursday, Nov. 18.

Price talk is not yet announced but note that the first-lien add-on will be fungible with the existing tranche due May 2026 that is priced at L+325, with a 0.75% Libor floor, and the 101 soft call protection will be reset for six months. The second-lien term loan due May 2027 will have a 0.50% floor.

Credit Suisse is left lead and administrative agent on the first-lien tranche and Nomura left lead and agent on the second-lien offering.

Investors are being told to expect first-lien ratings of B-/B1 and second-lien ratings of CCC/Caa1, with respective recovery ratings of 3 and 6 from S&P Global Ratings. Corporate ratings will be B-/B2, with stable outlooks.

Proceeds from the deal will be used to refinance the company's existing second-lien term loan due May 2027 (L+675, 0.75% floor), to pre-fund three acquisition targets, and to fund a cash distribution for future M&A and/or a dividend.

UKG, backed by Hellman & Friedman, is a provider of cloud-based human capital management solutions.