Weight Watchers sets structure, pricing for $2.4 billion term loans

By Paul A. Harris

Portland, Ore., March 28 - Weight Watchers International Inc. set final tranche sizing and price talk for $2.4 billion of bank debt, a market source said on Thursday.

A $350 million term loan B-1 due April 2016 is talked at a 275 basis points spread to Libor, discounted to 99.0, with a 101 soft call for 12 months.

A term loan B-2, sized at about $2.05 billion, is talked at a 300 bps spread to Libor with a 0.75% Libor floor, discounted to 98½ , with a 101 soft call for two years.

The coupon on both tranches steps up by 25 bps should the company's credit ratings fall to Ba3 from Moody's Investors Service and BB- from Standard & Poor's. Currently the respective ratings are Ba1 and BB-.

As previously reported, the company initially launched a single-tranche $2.4 billion term loan B due March 2020 on Monday with original issue discount talk of 99 to 991/2. It was guided at Libor plus 300 bps with a 0.75% Libor floor and 101 soft call protection for one year.

J.P. Morgan Securities LLC, BofA Merrill Lynch, HSBC Securities (USA) Inc., Scotia Capital (USA) Inc. and U.S. Bank are the lead banks on the deal.

Proceeds will be used to repay the company's existing term loan B due 2014, term loan C due 2015, term loan D due 2016, term loan E due 2017 and term loan F due 2019.

Weight Watchers is a New York-based provider of weight management services.

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