Santander-Led Bank Group to Retain $1.2 Billion Loan in Verint Acquisition Financing

A group of banks led by Banco Santander will retain a portion of the $2.7 billion financing for Thoma Bravo's acquisition of Verint Systems. The deal is an example of a buyout financing that banks have struggled to sell to leveraged loan investors. The banks will syndicate a $1.5 billion loan tranche, while retaining a $1.2 billion "last out" term loan. Pricing for the first lien is being discussed at 4 percentage points over the benchmark rate and a discounted price of between 97 and 98 cents on the dollar.

A group of banks led by Banco Santander will retain a portion of the $2.7 billion financing for Thoma Bravo's acquisition of Verint Systems Inc. The deal highlights the challenges banks face in selling buyout financing to leveraged loan investors. The banks will syndicate a $1.5 billion loan tranche, while retaining a $1.2 billion "last out" term loan. Pricing for the first lien is being discussed at 4 percentage points over the benchmark rate and at a discounted price of between 97 and 98 cents on the dollar Banks Cut Size of Debt Offering for Thoma Bravo’s Verint Buyout^[1].

The revised debt package is a result of pushback from some investors on the terms of the financing, leading the bank group to revise the pricing. The debt is now being discussed at about 4 percentage points over the Secured Overnight Financing Rate (SOFR), higher than the initially proposed terms Banks Cut Size of Debt Offering for Thoma Bravo’s Verint Buyout^[1].

Thoma Bravo plans to merge Verint with another portfolio company, Calabrio, both specializing in call center technology. The acquisition comes as Thoma Bravo seeks an additional $5.5 billion from the leveraged loan market for its acquisition of human-resources software provider Dayforce Inc. [^1, 2].

The deal is the latest example of a buyout financing that banks have struggled to sell to leveraged loan investors, forcing the banks to fund at least part of the LBO themselves. A lender call was held Tuesday afternoon, with commitments on the $1.5 billion portion due Oct. 14 Santander-Led Bank Group Stuck With Some Debt for Verint Buyout^[2].