BMC Raises $1.63 Billion of Bonds in Upsized Dollar Offering

BMC Software Inc. issued $1.63 billion of dollar-denominated debt after increasing the offering by about 18 percent and reducing a planned loan package.

The information technology provider, which yesterday scrapped plans for a 250 million-euro ($333 million) portion of the sale, issued 8.125 percent, eight-year securities to yield 589 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg.

Proceeds will be used to help fund the company’s $6.9 billion buyout by a group led by Bain Capital LLC and Golden Gate Capital. The cash will be placed in escrow until the acquisition is completed, the company said in a July 31 statement. The bonds are graded Caa1 by Moody’s Investors Service, the ratings company said in a statement.

The sale was earlier marketed at $1.38 billion, according to a person with knowledge of the transaction who asked not to be identified because the terms weren’t set.

BMC cut the amount of loans it’s seeking to about $3.9 billion from $4.5 billion, according to a person with knowledge of that transaction. The largest loan, a $2.88 billion term obligation that matures in May 2020, will pay the higher of 5 percent or 4 percentage points more than the London interbank offering rate, a borrowing benchmark that was set at 27 basis points today. A basis point is 0.01 percentage point.

The note offering is the largest high-yield issue globally since Schaeffler AG sold $2 billion in dollars and euros on July 18, Bloomberg data show.

Credit Suisse Group AG, Royal Bank of Canada, Barclays Plc, Deutsche Bank AG, Goldman Sachs Group Inc., Citigroup Inc., Jefferies Group LLC and Mizuho Financial Group Inc. managed the offering for the Houston-based company, Bloomberg data show.

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