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Walter Investment Seeks Loans; Salix Proposes Buyout Debt Rates

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Dec. 3 (Bloomberg) -- Walter Investment Management Corp., a mortgage servicer, is seeking $1.63 billion in loans to refinance debt, while Salix Pharmaceuticals Ltd. proposed rates on a $1.2 billion loan backing its acquisition of Santarus Inc.

Walter Investment is offering a $1.5 billion seven-year, covenant-light loan at 3.75 percentage points more than the London interbank offered rate, according to a person with knowledge of the deal, who asked not to be identified because the terms aren’t set. The debt, which is being arranged by Credit Suisse Group AG, will have a 1 percent minimum on the lending benchmark. The company is also seeking a $125 million revolving-credit line.

Salix, a maker of drugs for gastrointestinal diseases, is offering to pay 3.5 percentage points to 3.75 percentage points more than Libor on the $1.2 billion loan with a 1 percent minimum on the benchmark. Proceeds along with $750 million of bonds will be used to acquire Santarus for about $2.6 billion to gain treatments for diabetes and heartburn.

Leveraged loans in the U.S. have gained 4.8 percent this year, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 index this year. The price on the largest first-lien loans were little changed at 98.14 cents on the dollar today.

Arch Coal Inc., the industry’s second-most indebted borrower, is seeking a $300 million term loan to partially redeem its 8.75 percent bonds due in 2016.

OAO Mechel, the Russian coal producer with about $9.55 billion in net debt as of June, won a waiver from a group of banks to delay payments on a $1 billion loan until 2015 and 2016.

To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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