Moelis & Co. will help underwrite a $300 million bond offering for Aspect Software Inc. as the investment-banking firm seeks to diversify into capital markets from advising companies on mergers and restructurings.
Aspect, purchased in 2004 by private-equity firms Golden Gate Capital and Oak Investment Partners, is selling the second- lien notes due in 2017 to refinance debt, said Michael Provenzano, chief financial officer of the Chelmsford, Massachusetts-based company.
Kenneth Moelis, the former investment-banking president at UBS AG, co-founded the firm in July 2007 at the onset of the credit crisis. The capital markets unit set up last year is trying to capitalize on record high-yield debt sales and Moelis’s ties with private-equity firms that began at Drexel Burnham Lambert Inc., where he worked from 1976 to 1990.
“Kenny really grew up doing capital-markets transactions that evolved into mergers and acquisitions,” said Peter Nolan, managing partner at Leonard Green & Partners LP, a Los Angeles- based private-equity firm. “The firm has a certain amount of in-house expertise in capital markets, and it’s logical for them to get these mandates.”
Nolan worked with Moelis at Drexel and Donaldson Lufkin & Jenrette Inc.
Call Center Software
Aspect, which makes software for call centers, is also raising a $500 million term loan and a $30 million revolving credit line that will refinance existing debt, Provenzano said. The company was introduced to Moelis through Golden Gate and has been discussing debt refinancing options since December, he said.
Joint book runners Bank of America Corp. and JPMorgan Chase & Co., and co-managers Goldman Sachs Group Inc. and Moelis, may sell the notes as soon as next week, said a person familiar with the offering, who declined to be identified because terms aren’t set.
Price guidance on the $500 million term loan is 4.5 percentage points more than the London interbank offered rate, according to a different person familiar with the transaction. Libor, a lending benchmark, will be set at a minimum rate of 1.75 percent. The loan will be offered at 98.5 cents on the dollar, the person said.
Moelis spokeswoman Rohini Pragasam in New York declined to comment.
Companies have raised $95.7 billion of high-yield bonds in 2010, on pace for record issuance, after the debt rallied 49 percent in the past year, according to a Bank of America Merrill Lynch Index.
Moelis hired Christopher Ryan, the former head of credit fixed income at UBS AG, and Dominick Petrosino, the former head of leveraged finance at Bear Stearns Cos. last year. The firm has helped manage bond offerings for Clear Channel Outdoor Holdings Inc. and Reader’s Digest Association Inc. and advised William Lyon Homes Inc. in raising loans.
“The firm’s new but the folks came out of other top-tier firms,” Provenzano said.