Ortho-Clinical Diagnostics offers $1.15 billion eight-year notes

By Paul Deckelman

New York, April 30 - Ortho-Clinical Diagnostics Inc. was heard by high-yield syndicate sources Wednesday to be marketing a $1.15 billion offering of eight-year senior notes as part of the financing for the leveraged buyout of the Raritan, N.J.-based provider of medical laboratory testing services.

The sources said that the company will begin a roadshow for the deal on Friday. It is expected to run until May 7, with pricing then expected sometime after that.

The notes will be sold under Rule 144A and Regulation S for the life of the issue. They will have call protection for the first three years after issue.

The securities will be brought to market via joint bookrunners Goldman Sachs & Co., Barclays, Credit Suisse Securities (USA) LLC, UBS Securities LLC and Nomura Securities, with SMBC Nikko Capital Markets, Ltd., Jefferies & Co and RBS Securities Inc. acting as co-managers.

The bonds are expected to carry a Caa1 rating from Moody's Investors Service and a CCC+ rating from Standard & Poor's.

The bond deal is part of the financing for the $4.15 billion leveraged buyout of the company by the Carlyle Group from its current owner Johnson & Johnson.

The funding also includes equity, as well as a $2.525 billion senior secured credit facility (B1/B), consisting of a $2.175 billion seven-year term loan B and a $350 million five-year revolving credit line. The credit facility was launched following a bank meeting on Monday.

A bank debt market source said that price talk on the term loan was Libor plus 350 basis points, with a 1% Libor floor, an original-issue discount of 99 to 99½ and 101 soft call protection for six months.

Barclays, Goldman Sachs Bank USA, Credit Suisse, UBS and Nomura are leading the loan deal, with commitments due on May 7.

Closing of the acquisition is expected around mid-year, subject to customary regulatory approvals.

Sara Rosenberg contributed to this report

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