If you follow leveraged software names, this is one to watch. Symplr's owners, Clearlake Capital Group and Charlesbank Capital Partners, agreed to inject roughly $175 million of preferred equity and reorganize the debt stack into several tiers to buy more time on repayments. They have reached terms with multiple creditor groups and are seeking wider backing, according to people familiar with the matter who asked not to be identified.
To preserve cash, Clearlake and Charlesbank will defer interest on new junior-ranking securities. Spokespeople for Clearlake, Charlesbank, and Ares offered no comment, and Symplr did not respond to inquiries.
A group of second-lien lenders that includes Ares Capital Corp. plans to put in $103.5 million of new money via a first-out second-lien facility. That tranche would rank ahead of the rest of the second-lien debt, and any junior-ranking lender can participate. People familiar with the discussions said that facility would pay interest through a mix of cash and payment in kind.
Existing second-lien lenders are slated to receive a 100 basis point coupon increase. Lenders on the first-lien term loan due 2027 would also get a 100 basis point coupon bump if they consent to push the maturity out by three years. The loan documents will include tighter lender protections.
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Investors that skip the exchange would see their claims slide to the bottom of the capital structure and lose covenant protections.
This deal follows months of negotiation as Symplr's loans have traded at distressed levels after worries about artificial intelligence's rise pressured many software credits earlier this year. In the first quarter, Symplr was one of the largest markdowns in Ares' private credit fund. In July, Moody's Ratings cut the company and its loans further into junk, citing a higher chance of a restructuring.
Per recent Bloomberg pricing, the approximately $1.2 billion first-lien term loan for Symplr changed hands near 71.4 cents on the dollar, versus roughly 78 cents on March 4 and up to 86.5 cents on Jan. 5. Its second-lien term loan, almost $290 million in size and maturing in 2028, most recently traded around 70 cents. Symplr sits inside a continuation vehicle that holds only this single asset, according to a 2022 press release.
What this means for your wallet: higher coupons and tighter terms change the payout math. If you hold any piece of this stack, whether you join the exchange could affect both your interest check and where you stand in line.
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