Capsugel launches $1.07 billion credit facility at Libor plus 450 bps

By Sara Rosenberg

New York, July 11 - Capsugel launched its $1.07 billion senior secured credit facility (B1) on Monday with price talk of Libor plus 450 basis points with a 1.25% Libor floor, according to a market source.

The facility consists of a $920 million seven-year term loan B and a $150 million five-year revolver.

The B loan is being offered at an original issue discount of 99 and includes 101 soft call protection for one year, the source said.

UBS Securities LLC, Barclays Capital Inc., Deutsche Bank Securities Inc., Mizuho Securities USA Inc. and KKR Capital Markets are leading the deal, with UBS the left lead.

Proceeds will be used to help fund the buyout of the company by Kohlberg Kravis Roberts & Co LP from Pfizer Inc. for $2.375 billion in cash.

Other funds for the acquisition will come from a €325 million notes offering that is backed by a commitment for a €325 million bridge loan.

Closing is expected in the third quarter, subject to customary conditions, including regulatory approval in certain jurisdictions, such as the United States and the European Union.

Capsugel is a Peapack, N.J.-based manufacturer of hard capsules and drug-delivery systems. The company generated about $750 million in revenue and manufactured more than 180 billion hard capsules in 2010.

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