August 7, 2013 / 5:33 PM / 5 years ago

RLPC: Perrigo sets launch of $3.25B in loans to back Elan buy

NEW YORK, Aug 7 (Reuters) - Generic drugmaker Perrigo Co is expected to launch $3.25 billion in credit facilities backing its $8.6 billion acquisition of Irish biotechnology firm Elan to general syndication next week, sources told Thomson Reuters LPC.

Barclays and HSBC are leading the deal that is currently in pre-syndication. The facilities comprise a $600 million, five-year revolver, a $1.65 billion, 60-day bridge-to-debt loan and $1 billion in term loans.

The term loan portion of the financing will consist of a $300 million, two-year term loan and a $700 million, five-year term loan.

At current ratings of BBB/Baa3, drawn pricing on the facilities is LIB+137.5. The revolver pays 17.5b on an undrawn basis.

If Perrigo’s ratings were to change, drawn pricing could range from LIB+111.25 to LIB+225 and undrawn pricing could range from 12.5bp to 35bp.

A spokesperson at Barclays declined comment. Calls to HSBC and Perrigo were not returned by press time.

The fully underwritten loans will be used, alongside existing cash, to finance the cash portion of the Elan acquisition, pay fees and expenses, and refinance Perrigo’s existing debt.

On July 29, Perrigo said it had entered a definitive agreement under which it would acquire Elan in a cash and stock transaction valued at approximately $8.6 billion.

Perrigo and Elan will be combined under a new company incorporated in Ireland. Under the terms of the transaction Elan shareholders will receive $6.25 in cash and 0.07636 shares of the combined company for each Elan share they own.

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