Omnicare sets Aug. 11 launch for $2.9 billion credit facility

By Sara Rosenberg

New York, Aug. 3 - Omnicare Inc. has pinned down a date for the launch of its $2.9 billion credit facility, as the syndicate scheduled a bank meeting for Aug. 11, according to a market source.

JPMorgan, Lehman Brothers and SunTrust Capital Markets are joint lead arrangers and joint bookrunners on the deal. JPMorgan and Lehman Brothers are co-syndication agents, SunTrust is administrative agent, and CIBC World Markets, Merrill Lynch and Wachovia Securities are co-documentation agents.

As committed, the credit facility is expected to consist of a $700 million five-year term loan, an $800 million five-year revolver and a $1.4 billion 364-day loan facility with an interest rate of Libor plus 75 basis points.

Pricing on the term loan and the revolver will be based on ratings. If ratings are Baa1 or better or BBB+ or better, then the spread is Libor plus 50 bps. If ratings are Baa2 or BBB, the spread is Libor plus 62.5 bps. If ratings are Baa3 or BBB-, the spread is Libor plus 75 bps. If ratings are Ba1 or BB+, the spread is Libor plus 100 bps. If ratings are Ba2 or BB, the spread is Libor plus 125 bps. And, if ratings are below Ba2 or BB, the spread is Libor plus 175 bps.

The commitment fee on the revolver and 364-day facility are also based on ratings an can range anywhere from 12.5 to 37.5 bps.

Proceeds were used to fund the acquisition of NeighborCare Inc., which was completed on July 28 - meaning the credit facility has already funded even though syndication has not yet begun.

The company also has the option to get an additional $500 million 364-day loan facility after closing on this new deal. Proceeds from the incremental debt can be used for strategic acquisitions.

Omnicare is a Covington, Ky.-based provider of pharmaceutical care for the elderly. NeighborCare is a Baltimore, Md.-based institutional pharmacy provider serving long-term care and skilled nursing facilities, specialty hospitals, assisted and independent living communities, and other assorted group settings.

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