| NEW YORK
NEW YORK Dec 7 Pfizer Inc is in market
with a $1 billion, five-year revolver that will back the
company's spinoff of its animal health division, sources told
Thomson Reuters LPC.
JP Morgan is lead left. Bank of America Merrill Lynch,
Barclays and Morgan Stanley are to the right of JP Morgan.
Pfizer declined to comment. JP Morgan and Barclays declined
to comment. BAML and Morgan Stanley did not return calls by
Pricing will be based on corporate ratings of the spun-off
entity, to be called Zoetis. Ratings are expected to fall in the
Baa2/BBB to Baa3/BBB- range, according to sources. If Zoetis
obtains ratings of Baa2/BBB it will pay 15bp if the facility
remains undrawn. The company will pay LIB+125 if it draws down
amounts under the revolver.
However, if the new company obtains ratings of Baa3/BBB- it
will pay 20bp if the facility remains undrawn. The company will
pay LIB+150 on amounts drawn under the revolver.
If the company's ratings were to change beyond those
categories the company would pay a range between 12.5bp to
32.5bp if the facility remains undrawn and a drawn spread that
would range from LIB+112.5 to LIB+225.
Pfizer filed a registration in August for the initial public
offering of a minority stake in the new animal health company.
The giant drug concern announced its spinoff plans in June.
The JP Morgan, Bank of America Merrill Lynch and Morgan
Stanley IPO is expected to take place next year. The spinoff is
part of an ongoing makeover by Pfizer to divest
non-pharmaceutical businesses and boost shareholder returns.
The company agreed in April to sell its baby formula
business to Nestle SA for $11.85 billion. In the third quarter
of 2011, Pfizer sold its capsule-making business Capsugel to
Kohlberg Kravis Roberts for $2.38 billion in cash. - MS