Actavis gives more details on new debt for Allergan acquisition

By Marisa Wong

Madison, Wis., Nov. 18 – Actavis plc disclosed more details on the financing to support its acquisition of Allergan, Inc. in an 8-K filed Tuesday with the Securities and Exchange Commission.

The financing consists of a $2.5 billion tranche of three-year senior unsecured term loans, a $2.5 billion tranche of five-year senior unsecured term loans, $22.5 billion from the issuance and sale of senior notes by Actavis Funding SCS, $8.9 billion from the issuance and sale of common equity interests and/or mandatorily convertible preferred equity interests by Actavis and, if cash on hand is not available at closing, a senior unsecured bridge loan totaling $4,698,000,000.

Actavis entered into a commitment letter on Nov. 16 in connection with the financing. The parties to the commitment letter are JPMorgan Chase Bank, NA, J.P. Morgan Securities LLC, Mizuho Bank, Ltd., Wells Fargo Bank, NA and Wells Fargo Securities, LLC.

Under the commitment letter, if the credit documentation for the term loans does not become effective or notes and/or the equity securities are not issued and sold, Actavis will receive up to $36.4 billion of loans under a senior unsecured bridge facility.

The commitment letter also provides Actavis with the $4.7 billion cash bridge facility and replacement credit facilities for Actavis’ existing term loan facilities and revolving facility in the event that proposed amendments to the term loans and revolver to be sought in connection with the merger are not obtained.

The commitments are subject to several conditions, including no material adverse effect with respect to the company having occurred since the date of the merger agreement, negotiation of definitive financing agreements for the financing and other customary closing conditions.

Actavis is a pharmaceutical company with headquarters in Dublin. Irvine, Calif.-based Allergan is a multi-specialty health-care company.

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