Sourcecorp sets talk on first-and second-lien term loans with launch

By Sara Rosenberg

New York, April 7 - Sourcecorp Inc. released official price talk on its $350 million seven-year first-lien term loan at Libor plus 425 basis points and on its $200 million eight-year second-lien term loan at Libor plus 800 bps as the deal was launched with a bank meeting on Thursday, according to a market source.

Both term loans include a 1.25% Libor floor.

Also, the first-lien term loan is being offered at an original issue discount of 99½ and the second-lien term loan is being offered at 99, the source said.

The second-lien term loan has call protection of 102 in year one and 101 in year two.

The $625 million credit facility also provides for a $75 million revolver.

UBS Securities LLC, Credit Suisse Securities (USA) LLC and Jefferies & Co. are the lead banks on the deal.

Covenants include a maximum secured leverage requirement.

Proceeds will be used to help fund the company's merger with HOV Services Inc.

With the merger, shareholders of Sourcecorp and HOV will each control and receive 50% ownership of the combined company.

The combined company is expected to have about $480 million in revenue.

Closing is subject to customary conditions, including expiration of the antitrust waiting period.

Sourcecorp, a portfolio company of Apollo Management, is a Dallas-based provider of business process outsourcing and consulting services. HOV is a Troy, Mich.-based end-to-end business process outsourcing company.

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