| LONDON, July 15
LONDON, July 15 Drug capsule maker Capsugel is
refinancing $1 billion of leveraged loans in a deal that also
finances a $400 million dividend payment to its private equity
owner KKR, banking sources said on Tuesday.
KKR bought Capsugel from Pfizer in 2011 for $2.38 billion,
backed by around $1 billion of leveraged loans, according to
Thomson Reuters LPC data.
UBS, Citigroup, KKR Capital Markets, Barclays, Deutsche Bank
and Mizuho are leading the loan financing, which was shown to
institutional investors at a bank meeting on Tuesday. Lenders
have been asked to make commitments by July 28.
The financing includes a 355 million euro term loan, which
pays 300 basis points over Euribor with a 1 percent Euribor
floor, which guarantees a minimum return to investors.
The loans are offered with a 99.75 original issue discount.
A $175 million revolving credit is also included, bankers said.
Capsugel is also raising a $415 million Payment-In-Kind
(PIK) toggle note at the holding company level, which will
mostly be used to finance the dividend payment, the bankers
KKR declined to comment.
Capsugel makes capsules that are used in a variety of
(Editing by Tessa Walsh)