Embecta cuts spread on $1.15 billion term loan to SOFR plus 300 bps

By Sara Rosenberg

New York, Jan. 27 – Embecta Corp. reduced pricing on its $1.15 billion seven-year covenant-lite term loan B to SOFR plus 300 basis points from talk in the range of SOFR plus 350 bps to 375 bps, according to a market source.

Additionally, the original issue discount on the term loan firmed at 99.5, the tight end of the 99 to 99.5 talk, the source said.

As before, the term loan has a 0.5% floor, 0 bps CSA and 101 soft call protection for six months.

The company’s $1.65 billion of senior secured credit facilities (Ba3/B+) also include a $500 million revolver.

Morgan Stanley Senior Funding Inc., JPMorgan Chase Bank, Citigroup Global Markets Inc., Wells Fargo Securities LLC, MUFG, US Bank and BNP Paribas Securities Corp. are the joint lead arrangers and bookrunners on the deal. Citizens, Santander and PNC are co-managers. Morgan Stanley is the administrative agent.

Recommitments were scheduled to be due at noon ET on Thursday, the source added.

Proceeds will be used with $500 million of senior secured notes to fund the spinoff of the company from Becton, Dickinson and Co., including payment of the cash distribution to Becton, Dickinson, to pay related transaction fees, expenses and original issue discount, and for general corporate purposes.

Closing is expected in the second quarter.

Embecta is a diabetes care company.

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