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Kaseya launches syndicated leveraged loan deal to refinance private credit - PitchBook

Morgan Stanley-led arrangers have launched a $3.875 billion syndicated leveraged loan package for Kaseya, including a $2.95 billion seven-year first-lien term loan priced at S+325-350 and a $925 million eight-year second-lien term loan priced at S+525, to refinance existing private credit debt from its 2022 Datto acquisition and part of preferred equity, with S&P assigning B and CCC+ ratings respectively, alongside a new $535 million five-year revolving credit facility featuring a springing first-lien net leverage covenant.

A Morgan Stanley-led arranger group has announced price talk on $2.95 billion first-lien and $925 million second-lien covenant-lite term loans for Kaseya, Inc. These loans will be used to refinance existing private credit debt and a portion of preferred equity. Commitments to the deal are due by 5 p.m. ET on Thursday, March 6.

Loan Details:

  • First-lien term loan:

    • Amount: $2.95 billion
    • Term: Seven years
    • Pricing: S+325-350, 0% floor, OID of 99.5
    • Yield to maturity: ~7.90%-8.17%
    • Margin step-down: 25 bps at 0.5x inside closing first-lien net leverage, and 25 bps upon an IPO
    • Call protection: Six months of 101 soft call protection

  • Second-lien term loan:

    • Amount: $925 million
    • Term: Eight years
    • Pricing: S+525, 0% floor, OID of 99.5
    • Yield to maturity: ~10.03%
    • IPO step-down: 25 bps
    • Hard calls: 102 and 101 in years 1-2, respectively

Ratings:

  • S&P Global Ratings assigned a facility rating of B and a recovery rating of 3 to the first-lien facility.
  • The second-lien loan is rated CCC+, with a recovery rating of 6.
  • The issuer is rated B, with a stable outlook.

Kaseya will also have a new $535 million five-year revolving credit facility with a springing first-lien net leverage covenant.

Kaseya’s existing debt dates to its 2022 acquisition of Datto, which was backed by a financing commitment comprising a $3.3 billion term loan facility, a $200 million delayed-draw term loan, and a $200 million revolver. The financing was provided by a group of private credit firms, with Golub Capital Markets as the administrative agent. As of December 31, pricing for the first-lien term loan due June 2029 was S+550 with a 0.75% floor. The take-private acquisition of Datto valued the company at $6.2 billion.

Kaseya, a portfolio company of Insight Partners since 2013, provides IT and security management software for managed service providers (MSPs) and mid-market enterprises (MME).