May 2, 2019 / 10:38 AM / a year ago

ION Group scraps US$250m dividend ambitions

LONDON, May 2 (LPC) - ION Group has abandoned plans to take a US$250m dividend from ION Corporates in order to complete a US$1.96bn jumbo loan financing, banking sources said.

UBS is sole bookrunner on the loan, hoping a cut in net debt and a consequential reduction in leverage will make the financing more attractive to investors.

The loan launched in April to back the refinancing and combination of three software businesses - Openlink, TriplePoint and Wall Street Systems.

It initially launched at US$2.21bn but failed to garner enough support from investors after Moody’s rated it B3 with a negative outlook earlier this week, making it difficult for CLOs to invest in the low-rated paper, the sources said.

Removing the dividend could lead to a new rating as leverage has reduced to 4.95 times from 5.61 times, the sources said.

ION Group was not immediately available to comment.

“Tweaking the structure so net debt and leverage comes down should help with the rating. From a credit perspective not taking money off the table during a period of high execution risk is a good thing. Call it naive but you would like to think they’ve come out with something that they know will get the deal over the line,” an investor said.


The US$1.96bn loan comprises a US$1.56bn-equivalent, seven-year tranche and a US$400m-equivalent, four-year tranche following demand from some investors for shorter dated paper.

The exact currency split on both tranches is still to be decided depending on orders.

The seven-year tranche is guided to pay at 500bp over Euribor and 550bp over Libor on the euros and dollars, respectively. Both are offered with a 0% floor, at 98.5 OID.

The four year tranche is guided to pay 425bp over Euribor and 475bp over Libor, with a 1% floor at 99 OID.

In addition to the term loans there is a US$30m revolving credit facility.

Investors have been asked to commit to the revised financing by May 3, later than an original deadline of April 24.

In March, Openlink was in the market with a €310m leveraged loan to fund its acquisitions of cloud-based software firms Reval and Aspect, but that was scrapped and wrapped into the larger jumbo financing.

The €310m TLB financing did not complete before the original commitments deadline of March 22 after investors demanded more information about the acquisitions that the firm could not provide at the time.

That term loan was guided at 400bp over Euribor with a 1% floor at 99.25 OID at launch and was incremental on Openlink’s existing US$530m-equivalent seven-year term loan B that was arranged in March 2018 to back its acquisition by ION Group.

Openlink specialises in providing software for energy and trading, while TriplePoint provides software in commodities supply chains. Wall Street Systems provides treasury, trading and settlement solutions. (Editing by Christopher Mangham)

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