Member Article

Sage Group plc completes $400m US Private Placement

Business software provider The Sage Group plc, headquartered in Newcastle–upon-Tyne, has successfully raised $400 million via a US Private Placement (USPP).

HSBC acted as joint lead placement agent on the USPP, along with J.P. Morgan, in a deal that saw close collaboration between HSBC’s Yorkshire and North East Corporate Banking Centre and Debt Capital Markets division.

The USPP was heavily oversubscribed due to strong investor demand and was split into four tranches of 5, 7, 10 and 12-year notes, priced at 2.60%, 3.08%, 3.71% and 3.86% respectively.

This represented Sage’s longest dated USPP to date, reflecting the credit quality of the company and continued strength of the USPP market.

This is one of six cross-border private placements in 2013 where HSBC has acted as agent, leaving the bank placed second overall in cross-border USPP league tables in Q1 2013.

John Swift, group treasurer for Sage, said: “This transaction was a great success, with the Group locking in further core funding to underpin its long-term gearing ratio of a minimum of 1x net debt/EBITDA. The fixed interest rates achieved, ranging from 2.60% to 3.86% for maturities between 5 and 12 years, give the Group a greater certainty of cost of funding at relatively low rates.”

Martin Lunt, HSBC regional head of corporate banking in Yorkshire and the North East, said: “We are pleased to have worked with Sage on this US Private Placement where low fixed cost of funding has been achieved with debt maturity profiles currently not typically available in the banking market.

This private placement was heavily oversubscribed and to achieve debt maturity profiles of up to 12 years is testimony to the belief in this company and its management team.“

This was posted in Bdaily's Members' News section by Mark Lane .