Blue Coat firms discount price on $85 million second-lien loan at 97

By Sara Rosenberg

New York, Feb. 2 - Blue Coat Systems Inc. finalized the original issue discount on its $85 million second-lien term loan (Caa1/B-) at 97, the wide end of the 97 to 98 talk, according to a market source.

Pricing on the loan remained at Libor plus 1,000 basis points with a 1.5% Libor floor.

The company's $495 million senior secured credit facility also includes a $50 million revolver (B1/BB-) and a $360 million first-lien term loan (B1/BB-).

The first-lien term loan is priced in line with initial talk at Libor plus 600 bps with a 1.5% Libor floor and an original issue discount of 98.

There is 101 soft call protection for one year on the first-lien term loan and hard call protection of 103 in year one, 102 in year two and 101 in year three on the second-lien loan.

Jefferies & Co. is the lead bank on the deal.

Allocations are expected next week.

Proceeds will be used to help fund the buyout of the company by Thoma Bravo LLC and Ontario Teachers' Pension Plan for $25.81 in cash per share. The transaction is valued at roughly $1.3 billion.

Other funds for the transaction will come from about $479 million of equity.

Total leverage is around 3.75 times.

Closing is expected this quarter, subject to customary conditions, including regulatory and shareholder approvals.

Blue Coat is a Sunnyvale, Calif.-based provider of web security and WAN optimization services.

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