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Lenders to Carlyle-Backed Veritas Float New Debt-Swap Plan

Buildings in the Manhattan skyline in New York, U.S., on Thursday June 17, 2021. New York state's pandemic mandates were lifted last week, after 70% of the adult population has now been given at least one dose of a coronavirus vaccine. Photographer: Victor J. Blue/Bloomberg (Victor J. Blue/Bloomberg)

(Bloomberg) -- Lenders to Carlyle Group Inc.-backed Veritas US Inc. have submitted a new debt restructuring proposal as they attempt to end an impasse over how the company plans repay the billions it owes next year, according to people with knowledge of the matter.

A key creditor group recently proposed swapping existing debt into new first- and second-lien obligations backed by varying collateral, said the people, who asked not to be identified discussing a private matter. They also asked for a higher debt paydown than the company previously offered, the people said.

Veritas and its lenders earlier clashed over the size of the potential paydown along with how much debt should be tied to the company following the sale of its data protection business to Cohesity Inc., Bloomberg previously reported. 

The scuttled plan called for lenders to receive a $2.35 billion cash paydown. The lenders are represented by Houlihan Lokey and Davis Polk & Wardwell.

Messages with Veritas and Davis Polk were not immediately returned, while representatives with Houlihan and Carlyle declined to comment. 

Veritas, a software company, has more than $4 billion of debt due in 2025. It is split across dollar-denominated and euro-denominated term loans as well as secured bonds. 

The company’s roughly $1.7 billion term loan due in September 2025 is quoted at around 87.5 cents on the dollar, according to data compiled by Bloomberg. That’s down from more than 90 cents as recently as June.

Carlyle has owned Veritas since 2016.

(Adds loan price context in penultimate paragraph.)

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