RLPC: Endo markets $4.3B refinancing package

NEW YORK Tue Nov 26, 2013 5:19pm EST

NEW YORK Nov 26 (Reuters) - Malvern, Pennsylvania-based healthcare company Endo Health Solutions is marketing a $4.3 billion bond and loan refinancing package in conjunction with its $1.6 billion acquisition of Paladin Labs Inc, sources told Thomson Reuters LPC.

The acquisition triggers change of control requirements on Endo's existing debt, prompting the refinancing.

The loan portion comprises a $750 million institutional tranche, which is expected to launch at a December 4 bank meeting, along with a $1.85 billion pro rata portion that launched November 22.

The pro rata portion is typically syndicated to banks, while the institutional term loan is marketed to institutional investors.

The $1.85 billion pro rata piece is split between a $750 million, five-year revolver and a $1.1 billion, five-year term loan A. Price guidance on the revolver and term loan A is set at LIB+200, with no Libor floor. The revolver, which is expected to be undrawn at close, will carry a 35bp fee on the undrawn portion.

Lender commitments are due December 12, sources added.

The $1.68 billion bond portion of the financing is comprised of $500 million 7 percent notes due 2019; $400 million 7 percent notes due 2020; $400 million 7.25 percent notes due 2022; and $380 million 1.75 percent convertible notes due 2015.

The refinancing package will also be used to buy back Endo's outstanding convertible notes due April 2015.

Deutsche Bank and RBC Capital Markets committed financing for the transaction.

Paladin Labs shareholders will receive 1.6331 shares of Endo and C$1.16 in cash, subject to adjustment, for each Paladin Labs share they own upon closing, with around 98 percent of the purchase value made in stock.

Endo is a healthcare company with business segments that are focused on branded and generic pharmaceuticals, devices and services. Operating companies include AMS, Endo Pharmaceuticals, HealthTronics and Qualitest.

Paladin Labs Inc, headquartered in Montreal, Canada, is a specialty pharmaceutical company.

Deutsche Bank, Endo, and Paladin did not return calls for comment.

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