Veracode lifts term loan to $815 million, flexes to SOFR plus 475 bps

By Sara Rosenberg

New York, April 20 – Veracode (Mitnick Corporate Purchaser Inc.) upsized its seven-year first-lien term loan to $815 million from $580 million and terminated plans for a $235 million second-lien term loan, according to a market source.

Also, pricing on the first-lien term loan was increased to SOFR plus 475 basis points from revised talk of SOFR plus 400 bps and initial talk in the range of 400 bps to 425 bps, the source said.

In addition, the original issue discount on the term loan firmed at 99.5, the tight end of revised talk of 99 to 99.5 and tighter than initial talk of 98.5, and the 101 soft call protection was extended to one year from six months.

Furthermore, the incremental first-lien net leverage ratio was changed to unlimited subject to 7.75x first-lien net leverage from unlimited subject to 5.5x first-lien net leverage, the company added a total cap on superpriority debt at the greater of $125 million and 100% EBITDA, and quarterly lender calls are now required, the source continued.

The term loan still has one 25 bps step-down at 0.75x inside closing first-lien net leverage, a 0.5% floor and CSA of 10 bps.

Earlier in syndication, a 25 bps step-down at 0.5x inside closing first-lien net leverage was removed from the term loan.

Deutsche Bank Securities Inc. is the left lead bookrunner and administrative agent on the deal.

Commitments were scheduled to be due at 1 p.m. ET on Wednesday, the source added.

Proceeds will be used to help fund the buyout of the company by TA Associates in a transaction that values Veracode at $2.5 billion. Veracode’s current majority investor, Thoma Bravo, will retain a minority position in the business.

Closing is expected this quarter, subject to customary conditions.

Veracode is a Burlington, Mass.-based provider of application security solutions.

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