Harvard Drug Said to Seek Lower Rate on $300 Million Term Loan

Harvard Drug Group LLC, a pharmaceutical supplier, is seeking to lower the rate it will pay on a $300 million term loan B, according to a person with knowledge of the transaction.

The interest on the debt, due in 2019, will be reduced to 3.75 percentage points more than the London interbank offered rate and it will be sold at par, said the person, who asked not to be identified because the information is private. Libor, a rate banks say they can borrow in dollars from each other, will have a 1.25 percent floor.

Lenders are being offered one-year soft-call protection of 101 cents, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year, according to the person.

Morgan Stanley is arranging the transaction and commitments are due by noon on Feb. 5 in New York, the person said.

Harvard Drug will be paying out the 101 call protection to existing lenders in connection with the refinancing, the person said.

The company’s existing term loan pays interest at 4.75 percentage points more than Libor, with a 1.25 percent floor, according to data compiled by Bloomberg. The debt was sold to investors at 99 cents on the dollar and was quoted at 102 cents today, the data show.

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