Goldman Struggling to Sell $2 Billion in Bonds Backing Solera Buyout

By Sam Goldfarb and Liz Hoffman

Goldman Sachs Group Inc. is struggling to sell some $2 billion in bonds to fund a buyout of software firm Solera Holdings Inc., according to people familiar with the matter, the latest sign of trouble in the market for debt used in takeovers.

At $6.5 billion including debt, the software company's sale to Vista Equity Partners was one of the biggest private-equity sales announced last year. It has been widely viewed as a test of whether the credit market will continue to support corporate buyouts, especially those with big debt loads.

Goldman expected to sell the bonds at an annual yield of 10.75% to 11%, an increase from initial guidance of around 10%, investors said. But as of Thursday morning, it had found buyers for only about half the bonds, and pricing expectations moved above 11%, some of the people said. Vista has agreed to buy about $500 million worth of the debt, some of the people said.

The bond sale, which was initially expected to wrap up today, has proven a tougher task than Solera's $1.9 billion offering of leveraged loans backing the deal, which was oversubscribed last week. One option is for Solera to sell fewer bonds and increase the size of its loan sale, said the people familiar with the matter.

The difficulties are the latest sign that it is getting harder for heavily indebted companies to borrow. Junk-rated firms have issued just $11.6 billion in bonds so far this year, down from $48.5 billion during the same period last year and the lowest total since 2009 during the depths of the financial crisis, according to Dealogic.

Write to Liz Hoffman at liz.hoffman@wsj.com

(END) Dow Jones Newswires

February 25, 2016 14:44 ET (19:44 GMT)

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