Axcan cuts spread on $750 million term loan to Libor plus 400 bps

By Sara Rosenberg

New York, Feb. 7 - Axcan Holdings Inc. reducing pricing on its $750 million term loan to Libor plus 400 basis points from Libor plus 475 bps, according to a market source.

The 1.5% Libor floor, original issue discount of 99½ and 101 soft call protection for one year were left unchanged.

Recommitments were due from lenders at noon ET on Monday.

As was previously reported, the term loan was upsized from a most recent amount of $450 million and an initial amount of $225 million. The first upsizing was done when the company cancelled its $225 million secured notes offering.

The term loan now includes a $500 million funded tranche and a $250 million delayed-draw tranche, instead of being all funded.

The delayed-draw must be funded on or before March 17 but no earlier than March 11.

Bank of America, RBC Capital Markets, HSBC Securities and Barclays Capital are the joint lead arrangers and bookrunners on the deal.

Proceeds from the funded term loan, along with equity and cash on hand, will be used to fund the acquisition of Eurand NV for $12.00 per share, or $586.5 million total on a fully diluted basis, to repay Eurand's debt and to repay Axcan's outstanding term loan.

The delayed-draw term loan would be used to redeem or repurchase Axcan's existing 9¼% senior secured notes due March 1, 2015.

The company is also looking to get a $115 million amended and restated revolver that would extend the maturity to 2016 from Feb. 25, 2014.

The revolver will have total leverage and interest coverage covenants.

Axcan is a Mont-Saint-Hilaire, Quebec-based pharmaceutical company focused on the treatment of gastrointestinal disorders. Eurand is an Amsterdam-based specialty pharmaceutical company.

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