Valeant Refinances Loans; Samson Investment Cuts Borrowing Costs

Valeant Pharmaceuticals International Inc. is seeking to refinance about $5.7 billion of loans, while Samson Investment Co. and Hillman Group Inc. are asking lenders to cut the cost of their bank debt.

Valeant’s transaction includes loans used to back its $8.7 billion purchase of eye-care company Bausch & Lomb Holdings Inc. from Warburg Pincus LLC in August.

The Canadian drug distributor wants to lower the interest rate on a $3.2 billion term B loan to 2.75 percentage points to 3 percentage points more than the London interbank offered rate, down from 3.75 percentage points, the company said today in a regulatory filing. Valeant also seeks to extend maturities on $2.46 billion of term A loans to October 2018 from April 2016, the filing shows.

Samson, a unit of oil and natural gas company Samson Resources Corp., is seeking a $750 million covenant-light term loan with an interest rate of 4.25 percentage points more than Libor and a 1 percent floor on the lending benchmark, according to a person with knowledge of the transaction, who asked not to be identified because terms are private.

The company is repricing a $1 billion loan that pays 4.75 percentage points more than Libor and has a 1.25 percent floor, the person said. Samson said today in a statement on its website that it plans to repay $250 million of the loan.

Credit Suisse Group AG is arranging the deal and will host a call with lenders tomorrow to discuss the financing.

Cost Reduction

Hillman, a distributor of fasteners and keys, is seeking to reduce the cost of a $386.4 million term loan B to 2.75 percentage points to 3 percentage points more than the London interbank offered rate with a 1 percent floor on the lending benchmark, the person said. The debt currently has a spread of 3 percentage points and a 1.25 percent Libor floor.

Barclays Plc is arranging the financing and lenders are asked to let the bank know by Dec. 13 whether they will participate in the deal, according to the person.

A term loan B is sold mainly to non-bank lenders such as collateralized loan obligations, bank loan mutual funds and hedge funds. A term loan A is sold mainly to banks. Covenant-light loans lack standard protections for lenders such as limits on the amount of debt a company can have relative to its cash flow.

Blackstone Group LP, the world’s biggest private-equity firm, priced the largest CLO in Europe this year after increasing size of the deal by almost 50 percent to meet investor demand.

GSO Capital Partners LP, the firm’s credit investment unit, boosted the Richmond Park CLO Ltd. to 615.7 million euros ($840 million), according to two people with knowledge of the deal, who asked not to be identified because it’s private. CLOs pool high-yield loans and slice them into debt securities of varying risk and return.

The price of high-yield, high-risk loans averaged 98.13 cents on the dollar today, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 index.

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