LONDON U.S. drugmaker AbbVie’s (ABBV.N) 32 billion pounds acquisition of Dublin-based Shire Plc (SHP.L) is backed with a 13.5 billion pounds ($23.03 billion) bridge loan, according to the company's filing with the Securities and Exchange Commission in the US.
JP Morgan is the sole arranger and underwriter of the bridge loan, which is expected to be refinanced with up to 15.5 billion pounds of senior unsecured bonds that AbbVie is planning to issue to cover the cash element of the acquisition.
AbbVie bought Shire on Friday in a $54.7 billion deal that will allow it to slash its tax bill by relocating to Britain.
The bridge loan comprises a loan of up to 9.1 billion pounds with a 364-day maturity, a 3.2 billion pounds loan with a 364-day maturity, and a 1.2 billion pounds facility with a maturity of 60 days.
The financing pays an interest margin of 62.5 basis points (bps) to 150bps over Libor, depending on rating of the merged company after the acquisition.
There is also an initial commitment fee of 10bps on undrawn amounts, which can ratchet in a range from 6bps to 17.5bps, depending on the company's public debt rating after the acquisition.
AbbVie is being encouraged to refinance the debt quickly by a duration fee of 50bps, which is payable 90 days after closing. This rises to 75bps 180 days after closing and to 100bps 270 days after closing.
Shire was advised by Goldman Sachs, Morgan Stanley, Deutsche Bank, Evercore and Citigroup, while AbbVie was advised by J.P. Morgan.($1 = 0.5861 British Pounds)
(Editing by Tessa Walsh)