Attachmate Seeks $400 Million in Loans to Fund Dividend

Attachmate Corp. (ATTM), a systems infrastructure software provider, is seeking $400 million in loans to fund a dividend to sponsors, according to a person with knowledge of the transaction.

A $300 million incremental first-lien term loan due in April 2017 will pay 5.75 percentage points more than the London interbank bank offered rate, said the person, who declined to be identified because the terms are private. Libor, the rate banks say they can borrow in dollar from each other, will have a 1.5 percent floor.

A $100 million incremental second-lien term loan due October 2017 will pay 9 percentage points more than Libor with a 1.5 percent minimum on the benchmark, the person said.

Attachmate is proposing to sell both the first and second portions at 98 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.

Credit Suisse Group AG, Royal Bank of Canada, Bank of America Corp. and Wells Fargo & Co. are arranging the financing for the Seattle-based company and will host a lender call tomorrow to discuss the deal, the person said.

The proposed amendment will allow for the incremental term loans and increase the interest rate the company will pay on its existing $875 million first-lien term loan due in April 2017 to 5.75 percentage points more than Libor from 5 percentage points, the person said.

Lender Fees

The interest rate on Attachmate’s existing $275 million second-lien term loan due in October 2017 will also be increased to 9 percentage points more than Libor from 8 percentage points with the amendment.

Existing first-lien lenders that vote in favor of the amendment will be paid a 25 basis-point fee and second-lien lenders will receive a 50 basis-point fee, the person said. A basis point is 0.01 percentage point.

An investor group led by Golden Gate Capital Corp., Francisco Partners and Thoma Bravo acquired Attachmate for an undisclosed amount in June 2005, according to data compiled by Bloomberg.

A spokesman for San Francisco-based Golden Gate Capital declined to comment. Amber Roberts, a spokeswoman for Thoma Bravo, declined to comment. David Golob, a partner at Francisco Partners, didn’t respond to an e-mail seeking comment.

First-lien debt is repaid first in a bankruptcy or liquidation, second-lien debt is repaid next. In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.

To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net

To contact the editor responsible for this story: Chapin Wright at cwright4@bloomberg.net

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