Friday 21 July 2017

Warner Chilcott to seek rate cut on buyout loans

Emre Peker

Ardee-based pharmaceutical company Warner Chilcott Plc is seeking to cut interest rates on loans used to buy Procter & Gamble’s prescription-drug unit for $3.1bn in October.

A proposed amendment would reduce the London interbank offered rate floor on the term loans, according to a filing today with the US Securities and Exchange Commission. Libor is the rate banks charge to lend to each other.

Warner Chilcott pays 3.25 percentage points more than Libor for its $1bn term loan A and 3.5 percentage points over the benchmark for its $1.95bn term loan B, according to data compiled by Bloomberg.

The company asked lenders to drop the Libor floor on both loans by 0.5 percentage point to 1.75 percentage point, according to a person familiar with the negotiations.

The proposed amendment, which was reported earlier by Standard & Poor’s LCD, would also cut the term loan B’s spread over the benchmark by 0.25 percentage point to 3.25 percentage points, said the person, who declined to be named because the terms are private.

Rochelle Fuhrmann, a spokeswoman for Warner Chilcott, didn’t immediately return a message left at her office.

Bank of America is arranging the amendment and lenders have until January 22 to submit responses, the person said.

Warner Chilcott won’t pay a fee for the amendment, the person said. Credit Suisse Group AG, JPMorgan, Barclays Capital, Citigroup and Morgan Stanley are also in the bank group that arranged the loans backing the buyout.

Bloomberg

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