Hologic sets price talk; Accounts eye cash portfolio auction; LCDX softens slightly

By Sara Rosenberg

New York, Sept. 5 - Hologic Inc. came out with price talk on its credit facility as the deal was launched with a bank meeting during Wednesday's market hours.

In other news, market players are looking at a cash portfolio that is up for sale as bids are due on Thursday and LCDX was a touch weaker as equities were down.

Hologic held a bank meeting on Wednesday morning to kick off syndication on its senior secured credit facility, and in connection with the launch, price talk was announced, according to a buyside source.

The $200 million five-year revolver and the $250 million five-year term loan A are both being talked at Libor plus 225 basis points, the $850 million 51/2-year term loan B is being talked at Libor plus 250 bps and the $1.25 billion 18-month capital markets term loan X is being talked at Libor plus 175 bps, the source said.

The capital markets term loan X is expected to be refinanced with convertible debt or other equity or equity-linked financing.

"They made it sound like the primary focus is on the A and the revolver. Doesn't look like they're syndicating the term loan B to new investors, or really syndicating the term loan X," the buyside source remarked.

This sentiment was confirmed by a second source who also said "the focus is syndicating the revolver and term loan A right now."

"Made it sound like since they're doing this equity transaction, they don't really know how much they'll raise and so they may not need all of the term loan B," the buyside source continued.

Goldman Sachs, Bank of America, Citigroup and JPMorgan are the joint lead arrangers on the $2.55 billion deal, with Goldman Sachs and Bank of America the joint bookrunners and Goldman Sachs the left lead.

Leverage through the term loan A is 0.5 times, leverage through the term loan B is 2.1 times, leverage through the term loan X is 4.4 times and net debt leverage is 4.1 times, the source added.

Ratings on the deal are anticipated to come out by the end of this week.

Proceeds from the term loans will be used to help fund the acquisition of Cytyc Corp. and to repay bank debt at both companies if any is outstanding.

The revolver is expected to be undrawn at close.

Under the terms of the agreement, Cytyc shareholders will receive 0.52 of a share of Hologic common stock and $16.50 in cash for each share of Cytyc common stock they own. The cash consideration totals about $2.1 billion.

Hologic is a Bedford, Mass., developer, manufacturer and supplier of diagnostic and medical imaging systems dedicated to serving the health-care needs of women. Cytyc is a Marlborough, Mass., diversified diagnostic and medical device company.

Portfolio auction nabs attention

In trading news, market participants are looking at a portfolio that is being auctioned as bids are due on Thursday, according to a trader.

The $384 million cash portfolio is comprised of par names, with some first-lien and some second-lien debt, the trader said.

"Word is that it's the same people that did last week's portfolio auction for a $258 million portfolio," the trader remarked.

"Only about half of that portfolio got sold. I don't know if this new portfolio is the leftovers from that one and then some, or if it's all new names," the trader added.

LCDX drifts lower

LCDX was slightly weaker in yet another trading session that saw light volume, according to a trader.

The index went out around 95.05 bid, 95.15 offered, down from 95.20 bid, 95.35 offered, the trader said.

The index was said to be softer in sympathy with stocks.

On Wednesday, Nasdaq closed down 24.29 points, or 0.92%, Dow Jones Industrial Average closed down 143.39 points, or 1.07%, S&P 500 closed down 17.13 points, or 1.15%, and NYSE closed down 115.51 points, or 1.19%.

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