Bank of America Merrill Lynch to lead bond portion of Warner Chilcott $2.25 billion debt financing

By Paul A. Harris

St. Louis, July 30 - Bank of America Merrill Lynch will lead the bond portion of Warner Chilcott plc's $2.25 billion of debt offerings, according to sources close to the deal.

Proceeds from the bonds, as well as from new term loans, will be used to help fund a special dividend to the company's ordinary shareholders of $8.50 per share, or approximately $2.15 billion.

JPMorgan is leading the term loan, which will launch with a conference call on Tuesday.

Payment of the dividend is expected to take place before the end of the third quarter.

Assuming the successful completion of the proposed recapitalization plan, the company estimates that its full-year 2010 adjusted cash net income would be reduced by $0.20 to $0.25 per share, and looking ahead, the recapitalization is expected to reduce full-year 2011 adjusted cash net income by $0.65 to $0.70 per share.

The company explained that these anticipated reductions of adjusted cash net income per share would result from the estimated increased cash interest expense associated with the issuance of $2.25 billion of additional debt and the expected repricing impact of its outstanding term debt using current market assumptions.

Warner Chilcott is an Ireland-based specialty pharmaceutical company.

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