Concordia revises OID talk on U.S., sterling term loans to 93.5-94.5

By Sara Rosenberg

New York, Oct. 19 – Concordia Healthcare Corp. widened original issue discount talk on its $1.1 billion six-year term loan and £500 million six-year term loan to 93.5 to 94.5 from 99, according to a market source.

Also, pricing on the U.S. term loan firmed at Libor plus 425 basis points, the high end of the Libor plus 400 bps to 425 bps talk, and pricing on the sterling term loan firmed at Libor plus 475 bps, the wide end of the Libor plus 450 bps to 475 bps talk, the source said.

Furthermore, the 101 soft call protection on both term loans was extended to one year from six months, amortization was revised to 1% in year one, 2.5% in years two and three and 5% per annum thereafter, the MFN sunset was eliminated and the incremental allowance was cut to $250 million from $500 million.

As before, both term loans have a 1% Libor floor.

Previously in syndication, the maturities of the term loans were shortened from seven years.

The company’s roughly $2,075,000,000 secured credit facility (B+) also includes a $200 million revolver.

Commitments are due at noon ET on Tuesday, the source added.

Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, Jefferies Finance LLC and RBC Capital Markets are the leads on the debt financing.

Proceeds will be used to help fund the acquisition of Amdipharm Mercury Ltd. from Cinven and to refinance all of Amdipharm’s and Concordia’s existing bank debt.

Amdipharm is being bought for about $3.5 billion, consisting of cash consideration of about $1.2 billion, 8.49 million common shares of Concordia and the assumption of around $1.4 billion Amdipharm net debt upon closing, as well as a maximum performance-based earn-out of around $220 million payable in cash in the fourth quarter of 2016.

Other funds for the transaction are expected to come from $180 million in bridge loans, $790 million of seven-year senior unsecured debt coming as bonds and/or loans, $520 million of proceeds raised from a recent public equity offering and cash on hand.

Closing is targeted for Oct. 21, subject to satisfaction of certain customary conditions including stock exchange approval for the consideration shares that are issuable as part of the purchase price.

Concordia is an Oakville, Ont.-based health care company focused on legacy pharmaceutical products and orphan drugs. Amdipharm is a London-based pharmaceutical company.

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