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Source: Attachmate's sponsors to extract a dividend

by David Holley | Published January 26, 2012 at 12:50 PM

Private equity-owned Attachmate Corp. has launched a debt amendment and add-on financing that will enable the Seattle software developer to fund a special sponsor dividend, a source said.

Credit Suisse Group, RBC Capital Markets, Bank of America Merrill Lynch and Wells Fargo & Co. are arrangers.

This amendment will add $300 million to an $875 million first-lien loan and $100 million to a $275 million, unrated second-lien loan, a source said. The existing loans were used to fund Attachmate's $2.2 billion acquisition of Waltham, Mass., tech company Novell Inc. early last year. Those loans had been upsized by $50 million each at the time, from $825 million and $225 million, respectively.

Under the proposed amendment, the company will raise pricing on the loans from LIBOR plus 500 to LIBOR plus 575 basis points on the first-lien, and from LIBOR plus 800 to LIBOR plus 900 basis points on the second-lien, the source said. In return for voting for the amendment, existing first-lien lenders get a 25-basis points fee, and second-lien lenders will get a 50-basis points fee.

The loans have a 1.5% LIBOR floor, with a 98 offer price, the source said. An investment group led by Francisco Partners, Golden Gate Capital and Thoma Bravo LLC acquired Attachmate for an undisclosed sum in 2005. Hedge fund Elliott Associates LP, a Novell shareholder, had tried to buy Novell on its own, but agreed to become a shareholder in Attachmate as part of the leveraged buyout agreement in late November. In 2007 the sponsors reaped a $280 million cash dividend through a debt-funded recapitalization.

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Source: Attachmate's sponsors to extract a dividend

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