SS&C Announces Pricing of $750 million of Senior Notes

Rhea-AI Summary

SS&C Technologies Holdings, Inc. announced the pricing of $750 million of senior notes with an interest rate of 6.5% due 2032. The offering is expected to close on May 9, 2024. The company will use the net proceeds to repay existing loans and related fees.

Insights

Financial Analyst

SS&C Technologies Holdings, Inc.'s move to price $750 million of senior notes at an interest rate of 6.500% is a reflection of the company's strategy to manage its debt profile. The interest rate on these notes is indicative of the current market conditions and the company's creditworthiness. Investors should consider the interest rate in relation to prevailing rates for comparable corporate debt to assess the attractiveness of these notes. The offering's expected closing indicates near-term liquidity infusion, as the funds are earmarked to repay existing loans. By refinancing older debt with new instruments, SS&C may be aiming to take advantage of different interest rate environments or extend the maturity of its debt, potentially lowering interest expenses and improving its debt service coverage ratio. An investor should gauge how the increased debt load from the term B-8 loan could affect the company's leverage ratios and financial flexibility. It is vital to monitor the long-term impact of these capital structure changes on the company's financial health.

Legal Expert

The legal structure surrounding the issuance of the senior notes by SS&C Technologies Holdings, Inc. requires attention. The notes are guaranteed by the parent company and all of its existing domestic restricted subsidiaries, a common strategy to enhance the credibility of the debt instrument. Future guarantees by new domestic restricted subsidiaries may impose limitations on the company's operational flexibility. However, the private placement nature of the offering, under Rule 144A and Regulation S, enables the company to bypass the public registration requirements, thereby expediting the issuance process and potentially reducing costs. Still, the restriction on sale within the United States to certain types of investors limits the marketability of these instruments, which could influence their pricing and liquidity in the secondary market. As an investor, it's important to be aware that the lack of SEC registration restricts the transparency typically available with public offerings, necessitating a higher degree of due diligence.

WINDSOR, Conn., May 3, 2024 /PRNewswire/ -- SS&C Technologies Holdings, Inc. (the "Company" or "SS&C") (NASDAQ: SSNC), a global provider of investment, financial and healthcare software and software-enabled services, today announced the pricing of its private placement offering of $750 million in aggregate principal amount of its 6.500% senior notes due 2032 (the "Notes").

The Notes will have an interest rate of 6.500% per annum and are being issued at a price equal to 100% of their face value. The Notes will be issued by the Company's wholly-owned subsidiary, SS&C Technologies, Inc. (the "Issuer"), and guaranteed by the Company and all of its existing domestic restricted subsidiaries (other than the Issuer) that guarantee its existing senior secured credit facilities. The Notes would also be guaranteed by all of the Company's future domestic restricted subsidiaries that guarantee its senior secured credit facilities or certain other indebtedness. The offering of the Notes is expected to close on May 9, 2024, subject to customary closing conditions.

Substantially concurrently with the closing of the offering of the Notes, the Company expects to enter into the previously-announced term B-8 loan. The Company expects the principal amount of the term B-8 loan will be increased from $2,775.0 million to $3,935.0 million.

The Company estimates that the net proceeds from the offering will be approximately $744 million, after deducting the initial purchasers' discounts and estimated offering expenses. The Issuer expects to use the net proceeds of this offering, together with the net proceeds of the term B-8 loan and cash on hand, to repay all amounts owed under the term B-3 loan, the term B-4 loan, the term B-5 loan, the term B-6 loan and the term B-7 loan under its existing senior secured credit facilities, as well as to pay related fees and expenses.

The Notes are being sold in a private placement to qualified institutional buyers pursuant to Rule 144A and to non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act of 1933, as amended (the "Securities Act").

This communication does not constitute an offer to sell or the solicitation of an offer to buy the Notes nor shall there be any offer, solicitation or sale of the Notes in any state in which such offer, solicitation or sale would be unlawful. The Notes to be offered have not been and will not be registered under the Securities Act, or applicable state securities laws, and may not be offered or sold in the United States absent registration or pursuant to an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.

About SS&C Technologies

SS&C is a global provider of software and services for the financial services and healthcare industries. Founded in 1986, SS&C is headquartered in Windsor, Connecticut, and has offices around the world. Some 20,000 financial services and healthcare organizations, from the world's largest companies to small and mid-market firms, rely on SS&C for expertise, scale, and technology.

Caution Regarding Forward-Looking Statements

Certain information contained in this press release constitutes forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include statements concerning plans, objectives, goals, strategies, expectations, intentions, projections, developments, future events, performance, underlying assumptions, and other statements that are other than statements of historical facts.  Without limiting the foregoing, the words "believes", "anticipates", "plans", "expects", "estimates", "projects", "forecasts", "may", "assume", "intend", "will", "continue", "opportunity", "predict", "potential", "future", "guarantee", "likely", "target", "indicate", "would", "could" and "should" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words. Such statements reflect management's best judgment based on factors currently known but are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, but are not limited to, statements relating to the closing of the offering of the Notes, the anticipated use of proceeds therefrom, and the risks discussed in the "Risk Factors" section of the Company's most recent Annual Report on Form 10-K, which is on file with the Securities and Exchange Commission and can also be accessed on our website. Forward-looking statements speak only as of the date on which they are made and, except to the extent required by applicable securities laws, we undertake no obligation to update or revise any forward-looking statements.

 

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SOURCE SS&C

FAQ

What is the amount of senior notes priced by SS&C Technologies Holdings, Inc.?

SS&C Technologies Holdings, Inc. priced $750 million of senior notes.

What is the interest rate and maturity of the senior notes?

The senior notes have an interest rate of 6.5% per annum and are due in 2032.

When is the expected closing date of the offering?

The offering is expected to close on May 9, 2024.

How will SS&C Technologies Holdings, Inc. use the net proceeds from the offering?

The company plans to use the net proceeds to repay existing loans, including those under its senior secured credit facilities, and to pay related fees and expenses.