Warner Chilcott markets $4.4 billion deal

NEW YORK Wed Jul 3, 2013 2:10pm EDT

NEW YORK (Reuters) - Specialty pharmaceutical Warner Chilcott Plc WCRX.O is in market with $4.4 billion in credit facilities that will refinance and combine debt following the company's acquisition by drug manufacturer Actavis Inc (ACT.N), sources told Thomson Reuters LPC.

The company is looking to raise $2 billion in new term loans. It is also looking to amend and extend $2.4 billion of existing senior secured credit facilities at the Actavis level.

Proceeds from the two new term loans and $425 million in cash will repay $2.45 billion of existing Warner Chilcott bank debt. The amended loans, meanwhile, will replace a $1.8 billion term loan Actavis entered in June 2012 and a $750 million revolver from September 2011.

Bank of America Merrill Lynch and JP Morgan are joint bookrunners. BAML, JP Morgan HSBC, Bank of Tokyo-Mitsubishi and Mizuho are joint lead arrangers.

The new facilities consist of a $1 billion, three-year term loan and a $1 billion, five-year term loan. The amended facilities consist of a $1.65 billion, four year term loan and a $750 million revolver.

Pricing on the new three-year and five-year term loans is LIB+125 and LIB+137.5, respectively.

Both new tranches carry a $250 million increase option.

The new loans will be available for nine months after the transaction closes. The loans pay a 17.5bp ticking fee payable from the date of execution of the credit agreement and funding or termination of the loan commitment.

The amended term loan pays LIB+150, while the revolver pays LIB+125 if the facilities are drawn down and 15bp if the loan remains undrawn. Commitments are due July 18. Closing is expected July 25. Expected ratings are BBB/Baa3.

Actavis and Warner Chilcott announced on May 20 they have reached a definitive agreement under which Actavis would purchase Warner Chilcott in a stock-for-stock transaction valued at approximately $8.5 billion.

At the close of the transaction, which is expected by year-end 2013, Actavis and Warner Chilcott will be combined under a new company incorporated in Ireland, where Warner Chilcott is currently incorporated.

The newly created company, which will be called Actavis Plc, will create the third-largest U.S. specialty pharmaceutical company in the world with a focus on core therapeutic categories of women's health.

(Editing By Jon Methven)

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