Dec. 3 (Bloomberg) -- Salix Pharmaceuticals Ltd., a maker of drugs for gastrointestinal diseases, proposed the rate it will pay on a $1.2 billion loan it’s seeking to pay for the purchase of Santarus Inc.
The drugmaker will pay 3.5 percentage points to 3.75 percentage points more than the London interbank offered rate, according to a person with knowledge of the transaction. Libor, the variable benchmark rate for loans, will have a 1 percent minimum, said the person, who asked not to be identified because terms of the deal aren’t set.
Salix, based in Raleigh, North Carolina, agreed to acquire Santarus for about $2.6 billion to gain treatments for diabetes and heartburn, the companies said in a Nov. 7 statement.
Salix said it would pay for the San Diego-based pharmaceutical company with $1.95 billion in committed financing from Jefferies Group LLC and about $800 million of cash on hand.
The $1.2 billion term loan being marketed to investors may be sold at 99.5 cents on the dollar, the person with knowledge of the deal said. Lenders have until Dec. 13 to let Jefferies know whether they plan to invest in the financing.
G. Michael Freeman, a spokesman for Salix, didn’t immediately return a phone call seeking comment on the financing.
Jefferies also will provide Salix with a $150 million revolving credit line, according to the company’s statement last month. Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.
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