Medline reworks U.S. and euro term loan sizes, updates pricing

By Sara Rosenberg

New York, Sept. 29 – Medline Industries upsized its U.S. seven-year term loan to $6.5 billion and downsized its euro seven-year term loan to $500 million equivalent from $1 billion equivalent, but the U.S. term loan will be increased even further as funds are being shifted from the company’s bond offering, according to a market source.

The company intends to move $1.5 billion out of its previously $4 billion unsecured notes offering to its previously $3.77 billion senior secured notes and U.S. term loan B, with the final split of how much is going to the senior secured notes and how much is going to the U.S. term loan B still to be determined. The U.S. term loan B size could end up north of $7 billion, the source said.

Final sizes are expected to be determined on Thursday.

Also, pricing on the U.S. term loan was reduced to Libor plus 325 basis points from talk in the range of Libor plus 350 bps to 375 bps and the original issue discount firmed at 99.5, the tight end of the 99 to 99.5 talk, the source continued.

Pricing on the euro term loan was set at Euribor plus 350 bps, the low end of the Euribor plus 350 bps to 375 bps talk, and the original issue discount talk was changed to a range of 99.5 to 99.75 from a range of 99 to 99.5.

The U.S. term loan still has a 0.5% Libor floor, the euro term loan still has a 0% floor and both loans still have 101 soft call protection for six months.

BofA Securities Inc., Goldman Sachs Bank USA, JPMorgan Chase Bank, Barclays, Morgan Stanley Senior Funding Inc., MUFG, BMO Capital Markets, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Jefferies LLC, Macquarie Capital (USA) Inc., UBS Investment Bank, Wells Fargo Securities LLC, Bank of the West, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Mizuho, Nomura, RBC Capital Markets, Santander, Truist, ING, Societe Generale, Sumitomo, Bank of Nova Scotia and TD Securities (USA) LLC are the lead arrangers on the deal.

Recommitments are due at 10 a.m. ET on Thursday, the source added.

Proceeds will be used to help fund the buyout of the company by Blackstone, Carlyle and Hellman & Friedman.

Closing is expected late this year, subject to regulatory approvals and customary conditions.

Medline is a Northfield, Ill.-based manufacturer and distributor of health care supplies to hospitals, post-acute settings, physician offices and surgery centers.

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