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Warner Chilcott markets $4.4 billion deal

By Michelle Sierra

NEW YORK (Reuters) - Specialty pharmaceutical Warner Chilcott Plc is in market with $4.4 billion in credit facilities that will refinance and combine debt following the company's acquisition by drug manufacturer Actavis Inc , sources told Thomson Reuters LPC.

The company is looking to raise $2 billion in new term loans. It is also looking to amend and extend $2.4 billion of existing senior secured credit facilities at the Actavis level.

Proceeds from the two new term loans and $425 million in cash will repay $2.45 billion of existing Warner Chilcott bank debt. The amended loans, meanwhile, will replace a $1.8 billion term loan Actavis entered in June 2012 and a $750 million revolver from September 2011.

Bank of America Merrill Lynch and JP Morgan are joint bookrunners. BAML, JP Morgan HSBC, Bank of Tokyo-Mitsubishi and Mizuho are joint lead arrangers.

The new facilities consist of a $1 billion, three-year term loan and a $1 billion, five-year term loan. The amended facilities consist of a $1.65 billion, four year term loan and a $750 million revolver.

Pricing on the new three-year and five-year term loans is LIB+125 and LIB+137.5, respectively.

Both new tranches carry a $250 million increase option.

The new loans will be available for nine months after the transaction closes. The loans pay a 17.5bp ticking fee payable from the date of execution of the credit agreement and funding or termination of the loan commitment.

The amended term loan pays LIB+150, while the revolver pays LIB+125 if the facilities are drawn down and 15bp if the loan remains undrawn. Commitments are due July 18. Closing is expected July 25. Expected ratings are BBB/Baa3.

Actavis and Warner Chilcott announced on May 20 they have reached a definitive agreement under which Actavis would purchase Warner Chilcott in a stock-for-stock transaction valued at approximately $8.5 billion.

At the close of the transaction, which is expected by year-end 2013, Actavis and Warner Chilcott will be combined under a new company incorporated in Ireland, where Warner Chilcott is currently incorporated.

The newly created company, which will be called Actavis Plc, will create the third-largest U.S. specialty pharmaceutical company in the world with a focus on core therapeutic categories of women's health.

(Editing By Jon Methven)

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