Mon 12/06/2021 17:33 PM
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NSO Group’s larger lenders have organized with law firm Willkie Farr in the wake of Apple’s lawsuit against the company, according to sources.

The Israeli cybersecurity company’s lenders have previously formed groups with both Stroock and Gibson Dunn, as previously reported. However, some larger lenders, including Senator Investment Group and Birch Grove Capital, have remained on the sidelines until the Apple lawsuit and have now retained Wilkie Farr instead, the sources said. Wilkie Farr’s retention is likely to make it more challenging for the other lenders to advance their respective agendas, they added.

The Stroock group represented lenders with around 40% of the first lien loan, while the Gibson Dunn group represented two lenders, one of whom is a CLO with the largest position in NSO’s $395 million first lien term loan due March 2025, sources noted.

The hiring comes as the company grapples with a complaint filed against them from Apple Inc., which sought injunctive and compensatory relief that would bar the defendants from accessing Apple services and products.

While the company has taken other hits, including being blacklisted by the state department, shuffling senior leadership and an abrupt exit from the newly appointed CEO, the company has so far managed to avoid material impacts to the business, sources said. However, the Apple litigation is now by far the most concerning development to lenders, as the fallout from the lawsuit could substantially impact earnings, sources said.

The company was subsequently downgraded by S&P Global Ratings, citing risk of debt restructuring, a potential slowdown in new license sales and a potential covenant breach.

The company’s $100.9 million term loan due March 2025 was quoted today at 70.22/70.17, compared with 92.38/94.38 a month earlier. The $395 million first lien term loan due March 2025 was quoted at 56.85/63.15, compared with 81/82 a month earlier, according to Solve Advisors.

The company, Senator, Birch Grove and Willkie Farr did not immediately respond to requests for comment.

--Ellen Schneider, Patrick Fitzgerald
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