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Healthcare Royalty launches $750 million term loan B to investors
By Sara Rosenberg
New York, July 7 – Healthcare Royalty Inc. (HCRX Investments HoldCo LP) launched on its call on Wednesday a $750 million seven-year senior secured covenant-lite term loan B (Ba2//BBB-) that is talked at Libor plus 250 basis points to 275 bps with a 0.5% Libor floor and an original issue discount of 99.5, according to a market source.
The term loan has 101 soft call protection for six months and amortization of 1% per annum, the source said.
Mandatory prepayments are from an excess cash flow sweep of 50%, 25% and 0% subject to secured net leverage ratios greater than 4x, less than or equal to 4x but greater than 3.5x, and less than 3.5x, respectively, 100% of certain asset sale proceeds, subject to reinvestment rights with no step-downs, and 100% of debt issuance proceeds other than debt permitted under the credit agreement.
Security is a perfected first priority lien on substantially all tangible and intangible assets and capital stock of the borrower and guarantors.
Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, Truist, BMO Capital Markets, SVB, Raymond James and Stifel are the joint lead arrangers on the deal. Citi is the administrative agent.
Commitments are due at noon ET on July 16, the source added.
The company also plans on getting a new senior secured revolving credit facility and issuing senior notes due 2029.
Proceeds from the new debt and an initial public offering will be used to repurchase Holdings LP class B units as part of a reorganization buyback transaction.
Closing is expected in late July.
Healthcare Royalty is a Stamford, Conn.-based royalty acquisition company focused on the biopharmaceutical industry.
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