Herbalife trims term loan to $400 million, revises OID to 93

By Sara Rosenberg

New York, April 5 – Herbalife Ltd. (HLF Financing Sarl LLC) downsized its senior secured five-year covenant-lite term loan B to $400 million from $500 million and widened the original issue discount to 93 from revised talk of 96 and initial talk of 97, according to a market source.

Pricing on the term loan remained at SOFR plus 675 basis points with a 0.5% floor.

The term loan has hard call protection of 102 in year one and 101 in year two and a 101 soft call in year three, and amortization of 5% per annum.

Previously in syndication, pricing on the term loan was increased from talk in the range of SOFR plus 550 bps to 575 bps; the call protection was changed from a 101 soft call for one year; amortization was increased from 1% per annum; changes were made to documentation including to incremental, liens, restricted payment, investments, available amount usage, excess cash flow sweep, non-guarantor debt, foreign-subsidiary debt and Serta; and the public company change-of-control carve-out was removed.

Citigroup Global Markets Inc., Rabobank, BofA Securities Inc., Citizens and Mizuho are the lead arrangers on the deal. As of the effective date, Jefferies Finance LLC will be term loan B administrative agent and collateral agent. Subsequent to the effective date, an agency transfer will occur under which Jefferies will transfer the agent roles to Citizens Bank.

Recommitments were scheduled to be due at 12:30 p.m. ET on Friday, the source added.

The company is also expected to get a $400 million revolving credit facility.

Proceeds will be used with $800 million of secured notes, upsized from $700 million, to refinance an existing term loan B due August 2025 with an outstanding balance of $650.6 million as of Dec. 31, to refinance an existing term loan A and revolver and to repay a portion of the company’s 2025 senior notes.

Herbalife is a Los Angeles-based health and wellness company.

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