Endo Pharmaceuticals sets Monday launch for $900 million term loan B

By Sara Rosenberg

New York, May 18 - Endo Pharmaceuticals has scheduled a bank meeting at the W New York with a 3 p.m. ET start time on Monday to launch its proposed $900 million seven-year term loan B, according to one market source.

A bank meeting for the company's $500 million five-year revolver and a $1.5 billion five-year term loan A already took place on May 5.

Pricing on the revolver and term loan A can range from Libor plus 175 basis points to 250 bps based on leverage. Opening pricing is Libor plus 250 bps, with the revolver having a 50 bps unused fee.

Official price talk on the term loan B is not out yet. But, filings with the Securities and Exchange Commission outlined term loan B pricing at Libor plus 325 bps with a step-down to Libor plus 300 bps at 3.75 times leverage. There is expected to be a 1% Libor floor and 101 soft call protection for six months.

Amortization on the term loan A is 3.75% in year one, 7.5% in year two, 10% in years three and four, and 15% in year five, and amortization on the term loan B is 1% per year.

The credit agreement includes a $500 million accordion feature.

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

Morgan Stanley & Co. Inc. and Bank of America Merrill Lynch are the lead banks on the $2.9 billion senior secured credit facility, with Morgan Stanley the administrative agent.

Proceeds will be used to help fund the acquisition of American Medical Systems for $30 per share, or $2.9 billion in cash, which includes the assumption and repayment of $312 million of debt.

Other funds for the transaction will come from $700 million of senior notes that are backed by a commitment for a $700 million one-year bridge loan priced at Libor plus 625 bps, increasing by 50 bps at the end of each three-month period. There is a 1% Libor floor.

On a 2011 pro forma basis, the combined company would have had revenues of about $3 billion and EBITDA of about $1 billion.

The transaction is also expected to be accretive to adjusted diluted earnings per share by $0.60 in 2012 and by $0.80 in 2013.

Closing is expected late in the third quarter, subject to customary conditions, regulatory approval and American Medical stockholder approval.

Endo is a Chadds Ford, Pa.-based specialty health care company focused on branded products and specialty generics. American Medical is a Minnetonka, Minn.-based provider of devices and therapies for male and female pelvic health.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.