Warner Chilcott Said to Set Rate on $600 Million Dividend Loan

Warner Chilcott Plc, a drugmaker specializing in woman’s health and dermatology, set the interest rate it will pay on $600 million in loans the company is seeking to fund a shareholder dividend, according to a person with knowledge of the transaction.

The five-year, $300 million B-4/5 portion will pay interest at 3 percentage points more than the London interbank offered rate, said the person, who asked not to be identified because the terms are private.

Warner Chilcott will sell the loan at 99.5 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.

A $300 million B-6 piece due in March 2018 will pay interest at 3.25 percentage points more than Libor, with a 1 percent floor, according to the person. The debt will be sold to investors at 99.25 cents, the person said.

Lenders on both term loans will be offered one-year soft call protection of 101 cents, the person said, meaning the company would have to pay 1 cent more than face value to refinance the debt during its first year.

Bank of America Corp. and Goldman Sachs Group Inc. are arranging the debt for the Dublin-based company and investors must let the banks know by 3 p.m. today in New York whether they will participate in the transaction, the person said. The deal is expected to be distributed to investors this afternoon, according to the person.

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