Serena sets Tuesday launch for $450 million credit facility

By Sara Rosenberg

New York, Feb. 10 - Serena Software Inc. firmed up timing on its proposed $450 million senior secured credit facility with the scheduling of a bank meeting for Tuesday, according to a market source.

Previously, it was known that the deal would be February business, but a specific date had been unavailable.

Lehman Brothers, Merrill Lynch and UBS Securities are the joint lead arrangers on the credit facility, with Lehman the administrative agent.

The credit facility consists of a $375 million seven-year term loan talked at Libor plus 250 basis points and a $75 million six-year revolver talked at Libor plus 250 bps, the source said.

Amortization on the term loan is 1% per annum on a quarterly basis with the balance due at maturity.

The company will also have the ability to upsize its credit facility by up to $150 million through the addition of incremental term loans or an increase in revolver commitments.

Proceeds from the facility, along with proceeds from a proposed $225 million unsecured senior subordinated notes offering, will be used to help fund the leveraged buyout of Serena by Silver Lake Partners.

Under the LBO agreement, Silver Lake Partners has agreed to acquire Serena for $1.2 billion. Serena stockholders will receive $24.00 in cash in exchange for each share. Any of Serena's existing $220 million of convertible notes that are not converted to Serena stock prior to completion of the proposed transaction will be exchanged for $24.00 in cash for each Serena share.

The transaction is expected to be completed in the first quarter, subject to receipt of stockholder approval and customary regulatory approvals as well as satisfaction of other customary closing conditions, including receipt of debt financing.

Serena is a San Mateo, Calif., provider of software products for managing process and controlling change across the information technology environment.

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