Shutterfly LBO debt syndication put on hold after several rounds of changes

Shutterfly‘s lead debt arrangers, Barclays and Citi, have postponed the syndication process for the company’s LBO debt, according to three sources following the situation. The banks have already funded the financing package for the buyout, which closed two days ago.

The financing package backs Shutterfly’s approximately USD 2.7bn buyout by Apollo Global Management. Barclays launched the loan financing in early September, while the bonds launched last week. Both were originally slated to price on 20 September. The acquisition itself closed on Wednesday (25 September), according to a press release.

The sellside rolled out multiple rounds of revisions to the financing during syndication, most recently carving out a USD 280m pro-rata tranche from the loan and downsizing the institutional tranche to USD 750m from USD 1bn. The loan had already been downsized from USD 1.285bn last week, with funds shifted to the bonds.

As well as firming pricing at Libor+ 600bps with a 95 OID—the wide end of already widened price talk—the issuer on Thursday ( 26 September) offered 7% amortization on the downsized institutional tranche and a generous mandatory prepayment provision.

Revised talk for the upsized USD 785m bonds was at an 8.5% coupon with a 95 OID, wide of initial price talk released last week of 8.25%-8.5% all-in. Documentation on both the loans and the bonds was tightened at multiple points during syndication.

Pro forma the transaction, the company is levered 6.85x based on USD 318m of pro forma LTM adjusted EBITDA and USD 2.18bn of total debt.

Citi and Apollo declined to comment. Barclays did not respond to a request for comment.

2019 Debtwire

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