Warner Chilcott increases facility, no longer plans on selling notes

By Sara Rosenberg

New York, Oct. 5 - Warner Chilcott plc upsized its credit facility by $450 million and no longer plans on selling senior unsecured notes for its acquisition of Procter & Gamble Co.'s pharmaceuticals business, according to a market source.

The credit facility now includes a $1 billion five-year term loan A and a $1.95 billion, up from $1.5 billion, 51/2-year term loan B, inclusive of a $350 million delayed-draw term loan, the source said.

Pricing on the term loan A is Libor plus 325 basis points, down from original talk of Libor plus 350 bps, and pricing on the term loan B is Libor plus 350 bps, down from original talk of Libor plus 375 bps.

The delayed-draw commitment fee is half the drawn spread, so it's 175 bps.

The term loan A and term loan B are being sold to investors at an original issue discount of 99, the low end of initial talk of 98 to 99.

The $3.2 billion facility (Ba3/BB+) also includes a $250 million five-year revolver.

All tranches have a 2.25% Libor floor. This was reduced from 2.5%.

Commitments are due from lenders at 5 p.m. ET on Tuesday. This deadline was accelerated from the original timeframe of Oct. 13.

Bank of America and Credit Suisse are the co-lead arrangers on the credit facility. Bookrunners are Bank of America, Credit Suisse, Barclays, Citigroup, JPMorgan and Morgan Stanley. Credit Suisse is the administrative agent.

Under Warner Chilcott's original plans, $1.4 billion of notes was going to be sold to help fund the acquisition. This was later reduced to $450 million as a result of Warner Chilcott's sale of exclusive product licensing rights in the United States to its topical psoriasis treatments Taclonex, Taclonex Scalp, Dovonex to LEO Pharma for $1 billion. Now, that $450 million is being accounted for by additional term loan B borrowings.

The acquisition may close by the end of October, subject to regulatory approvals, the receipt of proceeds of the financing, the delivery of audited financial statements for the pharmaceuticals business and other customary conditions.

Warner Chilcott is a Rockaway, N.J.-based specialty pharmaceutical company.

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