Prestige Brands Sets Rate on $620 Million Loan for Buyout
Prestige Brands Holdings Inc. (PBH) set the interest rate it will pay on a $620 million term loan B it’s seeking to back its purchase of 17 over-the-counter medicine brands from GlaxoSmithKline Plc (GSK), according to a person with knowledge of the transaction.
The seven-year debt will pay interest at 4.5 percentage points more than the London interbank offered rate, said the person, who declined to be identified because the terms are private. Libor, the rate at which banks say they can borrow in dollars from each other, will have a 1.25 percent floor.
Prestige Brands is proposing to sell the loan at 98 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.
Lenders are being offered one-year soft-call protection of 101 cents, meaning Prestige would have to pay 1 cent more than face value to refinance the debt during the first year, the person said.
The Irvington, New York-based company is also seeking a $50 million asset-based revolving line of credit due in five years, according to data compiled by Bloomberg.
Citigroup Inc., Morgan Stanley and Royal Bank of Canada are arranging the financing for the maker of over-the-counter drugs, household cleaning and personal-care products, said the person. Lenders must submit commitments by Jan. 26 at 5 p.m. in New York.
The debt is rated Ba3 by Moody’s Investors Service and it graded BB- by Standard & Poor’s, the person said.
Sominex, Beano
Prestige Brands agreed to buy products from London-based Glaxo including digestive helpers Beano and Gaviscon, painkillers Ecotrin and Goody’s and Sominex sleep tablets for $660 million.
Ronald Lombardi, chief financial officer of Prestige Brands, didn’t respond to an e-mail seeking comment.
A term loan B is mainly bought by non-bank lenders such as collateralized loan obligations, bank-loan mutual funds and hedge funds. In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.
To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net
To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net
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