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BMC Raises $750 Million to Pay Bain After 2013 Buyout

April 8 (Bloomberg) -- BMC Software Inc. raised $750 million of debt to pay a dividend to shareholders including Bain Capital LLC seven months after they acquired the provider of software that runs corporate computer networks.

BMC, which boosted the offering from an initial $500 million, issued the 9 percent notes due October 2019 through Boxer Parent Co., according to data compiled by Bloomberg. The company may make interest payments by issuing additional debt if cash at the Houston-based company falls below a certain level, according to a preliminary prospectus.

The bonds were priced to yield 726 basis points, or 7.26 percentage points, more than similar-maturity Treasuries, the data show.

Standard & Poor’s graded the notes CCC+ and lowered the company’s rating to B from B+, saying the debt sale “will result in a further deterioration in BMC’s ‘highly leveraged’ financial risk profile following its LBO.”

Moody’s Investors Service cut the company’s rating one level below S&P’s grade to B3 from B2. Moody’s downgrade was a result of how quickly the private-equity holders are adding debt to pay themselves, according to a statement from the ratings company. It rated the new bonds Caa2, also one level below S&P.

Bain, and co-investors Golden Gate Capital Corp., GIC Special Investments Pte. and Insight Venture Partners LP are cashing in on their $6.7 billion acquisition, which closed in September. The parent company currently has $6.2 billion of loans and bonds outstanding, Bloomberg data show.

BMC sells software that manages fleets of computer servers and mainframes, configuring new machines and applying updates to older ones. One of BMC’s business units makes software for managing server networks and the other is focused on mainframe products.

To contact the reporter on this story: Matt Robinson in New York at mrobinson55@bloomberg.net

To contact the editors responsible for this story: Shannon D. Harrington at sharrington6@bloomberg.net Richard Bravo, Chapin Wright

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