Endo lifts term B to $2.8 billion, updates term debt spreads and OIDs

By Sara Rosenberg

New York, June 24 – Endo International plc (Endo Luxembourg Finance Co. I Sarl and Endo LLC) upsized its seven-year term loan B to $2.8 billion from $2.5 billion and firmed pricing at Libor plus 300 basis points, the low end of the Libor plus 300 bps to 325 bps talk, according to a market source.

Also, the original issue discount on the term loan B was revised to 99.75 from 99.5, the source said.

In addition, pricing on the $1 billion asset-sale bridge loan was set at Libor plus 275 bps, the wide end of the Libor plus 250 bps to 275 bps talk, and the discount was tightened to 99.75 from 99.5, the source continued.

Both term loans still have a 0.75% Libor floor, and the term loan B still has 101 soft call protection for six months.

The term loans have a ticking fee of half the spread from days 31 to 60 and the full spread thereafter.

The bridge loan has a duration fee of 25 bps at days 120, 180 and 270.

The asset-sale loan maturity is the earlier of one year and the receipt of the AMS sale proceeds.

Financial covenants include a maximum secured leverage ratio and a minimum interest coverage ratio.

Recommitments were due at 10:30 a.m. ET on Wednesday.

Deutsche Bank Securities Inc., Barclays, Bank of America Merrill Lynch and Morgan Stanley Senior Funding Inc. are the bookrunners on the now $3.8 billion in bank debt, up from $3.5 billion.

Proceeds will be used to help fund the acquisition of Par Pharmaceutical Holdings Inc. from TPG in a transaction valued at $8.05 billion, including the assumption of debt.

The purchase price will consist of about 18 million shares of Endo equity and $6.5 billion cash consideration to Par shareholders.

Other funds for the transaction will come from $1,635,000,000 of senior notes, upsized from $1,435,000,000, the source added.

The additional $500 million of proceeds being raised from the term loan B and notes upsizings will be used to refinance 7% senior notes due 2019.

Closing is expected in the second half of this year, subject to regulatory approval in the United States and certain other jurisdictions, as well as other customary conditions.

Endo is a Dublin, Ireland-based specialty pharmaceutical company. Par Pharmaceutical is a Woodcliff, N.J.-based developer, manufacturer and marketer of pharmaceuticals.

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