Tibco succumbs to investor demands

摘要

A high-profile US$2.02bn leveraged loan for tibco software is the latest US buyout deal that has been forced to add expensive perks to attract buyers as risk-averse investors hold out for better terms amid a market correction. Tibco increased its loans by US$70m to finance a deeper discount. The company also increased the interest margin on the loan and made other concessions designed to tempt investors into the deal. Loan buyers are treading cautiously after a volatile October saw interest margins on US leveraged loans widen by 100bp-150bp as the equity markets took a hit and the federal government warned on leveraged lending. US regulators are clamping down on risky loans and have been taking a tougher line on deals that fall outside leveraged lending guidelines, which say that deals should not have leverage of more than six times debt to Ebitda. Tibco's high level of indebtedness at 11 times debt to Ebitda, according to Moody's, gave investors enough ammunition to ask for higher compensation, bankers said.