Prestige ups term B to $660 million, cuts spread to Libor plus 400 bps

By Sara Rosenberg

New York, Jan. 24 - Prestige Brands Holdings Inc. upsized its seven-year term loan B (Ba3/BB-) to $660 million from $620 million and reduced pricing to Libor plus 400 basis points from Libor plus 450 bps, according to a market source.

Also, the original issue discount was tightened to 98½ from 98, the source said.

The 1.25% Libor floor and 101 soft call protection for one year were left unchanged.

Financial covenants include a maximum consolidated total net leverage ratio and a minimum consolidated net cash interest coverage ratio.

Amortization is 1% per annum, with the remainder due at maturity.

Commitments are due at noon ET on Wednesday, accelerated from an original deadline of 5 p.m. ET on Thursday.

The company's now $710 million senior secured credit facility, up from $670 million, also provides for a $50 million five-year asset-based revolver.

Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and RBC Capital Markets LLC are the lead banks on the deal, with Citi the left lead.

Proceeds will be used to help fund the acquisition of 17 over-the-counter GlaxoSmithKline plc brands for $660 million and to refinance existing bank debt.

The cash purchase price for the GlaxoSmithKline brands will be structured as asset purchases that result in substantial tax benefits, creating an effective purchase price of a total of $535 million.

Other funds for the transaction will come from $250 million of senior notes that were downsized from $290 million as a result of the term loan upsizing.

At close, the company expects its total debt to be $1.15 billion.

Closing is targeted for the first half of this year, subject to customary legal and regulatory closing conditions, including clearance under the Hart-Scott Rodino Antitrust Improvements Act of 1976, and financing.

Prestige is an Irvington, N.Y.-based marketer of branded consumer products in the over-the-counter health care and household cleaning industries.

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