Goldman Sachs offers Citrix debt at 14pc yield

A group of banks led by Goldman Sachs Group launched a £3.84bn deal to offload the riskiest chunk of financing from last year’s Citrix Systems buyout, according to people with knowledge of the matter. fter being saddled with the debt for months, the banks are offering the 6.5-year second-lien notes at a coupon of 9pc, said the people, who asked not to be named discussing a private transaction. The bonds are initially being marketed at a heavily discounted price of 78 cents, bringing the all-in yield to roughly 14pc, said the people. Goldman Sachs and others previously floated a yield of 13pc-14pc in February.

Representatives for Goldman Sachs, Citrix and buyout sponsors Vista Equity Partners and Elliott Investment Management didn’t respond to requests for comment on the initial pricing. This last major portion of the Citrix financing is considered the riskiest because investors won’t be given first priority should the company ever go bankrupt. It’s also the first subordinated debt offering to come to the high-yield market this year, according to data compiled by Bloomberg.

The current bond sale means banks are within striking distance of unhooking themselves from the biggest piece of remaining debt supporting Vista and Elliott’s acquisition of Citrix. It would also put a bow on the deal that was expected to net banks hefty fees but instead underscored the difficulty of offloading mistimed financing commitments. Lenders had originally provided £15bn of debt financing for the buyout, but only managed to sell £8.55bn of bonds and loans at rock-bottom prices before the transaction closed.

They have pared that amount over the past few months, including a £271.6m portion offloaded earlier this year.

Banks have been struggling to sell debt languishing in their books from high-profile deals such as the take-private of Twitter and the combination of NielsenIQ and GfK.