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Herbalife upsizes to $800 million, launches secured notes with 12¼% coupon to yield 13%
By Paul A. Harris
Portland, Ore., April 5 – Herbalife International Inc. and HLF Financing Sarl LLC upsized their offering of five-year senior secured notes (Ba2/B+) to $800 million from $700 million, and launched the deal with a 12¼% coupon to yield 13%, according to market sources.
Deal terms are expected on Friday afternoon.
Pricing climbed a steep trajectory since the deal came into the market early in the week with early guidance in the 11% area.
Later in the week, with interest in the deal heard to be less than robust, official talk surfaced, specifying a coupon of 11¾% and a yield of 12½%, whereupon orders for the bonds built to $1 billion, sources say.
The notes come with two years of call protection and feature an equity clawback of up to 40% and a 101 poison put.
Citigroup Global Markets Inc. is lead left bookrunner for the Rule 144A and Regulation S for life offering.
Rabobank, BofA Securities Inc., Citizens Capital Markets Inc. and Mizuho Securities USA Inc. are also bookrunners.
With the upsize of the notes the concurrent term loan downsized to $400 million from $500 million. The discount on the loan, which is coming with a 675 basis points spread to SOFR, deepened to 93 from 96.
The notes and loan underwent covenant changes which primarily bear upon how the company may disburse cash and incur additional debt.
Proceeds from the notes and loan, along with a $400 million senior secured revolving credit facility, will be used to refinance the company’s senior notes due 2025.
Herbalife is a Los Angeles-based nutrition and weight management company.
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