BMC Software Kicks Off $6.6 Billion Loan Refinancing Package

(Bloomberg) -- Banks led by Goldman Sachs Group Inc. have launched one of the largest leveraged loan deals this year to refinance BMC Software’s upcoming maturities.

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The technology company owned by KKR & Co. is marketing $6.6 billion worth of leveraged loans, according to a person familiar with the matter. The debt package includes a seven-year $3.95 billion first-lien loan, a seven-year euro-denominated first-lien loan equivalent to $1.95 billion and an eight-year $750 million second-lien loan, said the person, who declined to be identified because the details are private.

Initial pricing discussions for the first-lien loan are for a margin of 375 to 400 basis points over the Secured Overnight Financing Rate, and 400 to 425 basis points over the benchmark for the euro-denominated loan. The second-lien loan is being discussed at a margin of 575 to 600 basis points over SOFR.

All three tranches are being offered at a slight discount of 99.5 cents on the dollar. Commitments are due on July 2.

BMC and KKR, which is leading the second-lien portion of the sale, declined to comment. Representatives for Goldman didn’t immediately respond to requests for comment.

The BMC loan package is among the largest in a year that’s been dominated by companies seeking to opportunistically refinance or reprice their borrowings. It comes less than seven months after the company extended much of its debt late last year.

KKR is again reviewing options to exit its BMC investment, Bloomberg reported in April. The company could be worth about $15 billion including debt in a sale or initial public offering. The buyout firm has received inbound interest from other private equity firms interested in potentially acquiring Houston-based BMC.

--With assistance from Jeannine Amodeo.

(Adds price talk, company’s and bank’s responses to Bloomberg’s requests for comment.)

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