Valeant Reduces Term Loan to $2.8 Billion; Cerberus Raises CLO

Valeant Pharmaceuticals International Inc. cut the size of a term loan B to at least $2.8 Billion, while Wells Fargo & Co. priced a $458 million collateralized loan obligation for Cerberus Capital Management.

Valeant reduced the syndicated loan from $3.18 billion, with plans to fund the shortfall with additional term loan A borrowings, cash and drawing on its revolver, according to information from a person with knowledge of the offering who asked not to be identified because terms aren’t set.

The debt is being offered at 300 basis points more than the London interbank offered rate, with a 0.75 percent minimum on the lending benchmark. The Canadian drug distributor also is seeking to extend a $1.7 billion term loan portion and a $765 million piece to October 2018.

The CLO raised by Wells Fargo for Cerberus includes a $182 million Aaa rated portion that pays 200 basis points more than Libor, according to person with knowledge of the transaction who asked not to be identified without authorization to speak publicly.

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 was little-changed at 98.16 cents on the dollar today.

Ion Media Networks Inc. set the final interest rate on a $720 million term loan to fund a dividend to common shareholders of the West Palm Beach, Florida-based company, according to person with knowledge of the offering who asked not to be identified with out authorization to speak publicly.

The seven-year debt will pay 400 basis points more than Libor, with a provision for a reduction of the rate with a drop in first-lien leverage, the person said. The deal also includes a $75 million, five-year revolving credit facility, proceeds of which will be used to refinance an existing line, according to the person.

A term loan B is sold mainly to non-bank lenders such as CLOs, bank loan mutual funds and hedge funds. A term loan A is sold mainly to banks. A basis point is 0.01 percentage point.

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