Business Context and Reporting Period
SS&C Technologies Holdings Inc. filed a Form 8-K on March 28, 2019, reporting the entry into a material definitive agreement. The filing details a debt issuance by the company's wholly-owned subsidiary, SS&C Technologies, Inc.
Key Financial Metrics
- Debt Issuance: $2.0 billion aggregate principal amount of 5.500% Senior Notes due 2027.
- Interest Rate: 5.500% per annum, payable semiannually in arrears starting September 30, 2019.
- Maturity Date: September 30, 2027.
- Issuance Price: 100% of face value.
- Guarantees: Fully and unconditionally guaranteed by the Parent and specific subsidiaries on a joint and several basis.
- Ranking: Senior unsecured obligations, ranking equal to existing senior unsecured debt but effectively subordinated to secured liabilities.
Material Changes
The primary material change is the creation of a new $2.0 billion long-term debt obligation. This issuance was conducted via a private placement to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S. The filing does not provide comparative financial metrics (revenue, profit, cash flow) as this is a transactional report rather than a periodic financial statement.
Guidance, Outlook, and Covenants
Redemption Provisions:
- Make-Whole: Prior to March 30, 2022, the Issuer may redeem notes at 100% plus a make-whole premium.
- Scheduled Redemption: On or after March 30, 2022, redemption prices decline from 104.125% in 2022 to 100.000% in 2025 and thereafter.
- Equity Redemption: Prior to March 30, 2022, up to 40% of the notes may be redeemed at 105.500% using proceeds from equity offerings.
- Change of Control: Triggers a mandatory offer to repurchase notes at 101% of principal.
Covenants: The Indenture restricts the Parent and subsidiaries from incurring additional indebtedness, making certain investments, selling assets, paying dividends, or incurring liens. Certain covenants are suspended if the Notes maintain an investment-grade rating from two major agencies.
Investor Verification Checklist
- Verify the full text of the Indenture (Exhibit 4.1) for specific definitions of "Change of Control" and "Investment Grade."
- Confirm the impact of the new $2.0 billion debt on the company's leverage ratios and interest coverage.
- Review the list of Guarantors to ensure no significant subsidiaries were excluded from the guarantee.
- Assess the company's ability to meet the semiannual interest payments starting September 30, 2019.