TRLPC: Ortho-Clinical Diagnostics details $2.525B buyout loan

NEW YORK, April 29 Tue Apr 29, 2014 10:24am EDT

NEW YORK, April 29 (Reuters) - Ortho-Clinical Diagnostics (OCD) outlined price guidance and terms on its $2.525 billion senior secured credit facility that funds, in part, the Johnson & Johnson Inc unit's acquisition by the Carlyle Group , sources said.

The loan package, as reported, is split between a $350 million, five-year revolving credit facility and a $2.175 billion, seven-year term loan.

Price guidance on the covenant-lite term loan is set at LIB+350 with a 1 percent Libor floor. The loan is offered to investors at an original issue discount of 99-99.5. It has 101 soft call protection for six months.

The term loan will amortize at 1 percent annually.

Lead left Barclays is arranging the credit facility, with Goldman Sachs, Credit Suisse, UBS and Nomura joining on the right. The loan launched Monday at a bank meeting. Commitments are due May 7.

J&J is selling the clinical diagnostics business to Carlyle for $4.15 billion. In addition to the leveraged loan portion, the financing package is expected to include $1.15 billion in senior unsecured notes.

Senior leverage on the deal is 3.2 times and total leverage is 5.1 times, sources said.

Moody's Investors Service on April 25 assigned first-time ratings to Ortho-Clinical Diagnostics SA. Moody's assigned a B2 corporate family rating and a B1 facility rating to the new credit facilities. Additionally, the rating agency assigned a Caa1 rating to the proposed $1.15 billion senior unsecured notes offering.

OCD SA, a Luxembourg entity, is the parent company of Ortho-Clinical Diagnostics Inc, a U.S. entity. OCD SA and OCD Inc are the co-borrowers of both the senior secured credit facilities and the unsecured notes, Moody's said in a ratings note. The outlook is stable.

Raritan, NJ-based OCD serves clinical laboratories and the transfusion medicine community. The company provides tools for early screening, diagnosing, monitoring and confirming diseases, focused on supporting hospitals, laboratories and blood centers globally.

The company generated approximately $1.9 billion of revenues for the year ending December 29, 2013, according to Moody's. The transaction is expected to close mid-2014. (Editing By Michelle Sierra and Jon Methven)

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