Royalty Pharma launches $500 million add-on term loan at OID of 99-99½

By Sara Rosenberg

New York, May 17 - Royalty Pharma launched its $500 million add-on term loan (BBB-) due 2018 with original issue discount talk of 99 to 99½ on Thursday, according to a market source.

Pricing on the add-on is Libor plus 300 basis points with a 1% Libor floor, in line with existing 2018 term loan pricing.

The existing loan was sold last summer at an original issue discount of 991/2.

Bank of America Merrill Lynch, Goldman Sachs & Co. and Citigroup Global Markets Inc. are the lead banks on the deal.

Proceeds will be used to back the already completed $761 million acquisition of an interest in the earn-out payable to the former shareholders of Fumapharm AG.

The Fumapharm earn-out primarily represents an indirect interest in Biogen Idec's BG-12, an oral therapeutic candidate for the treatment of relapsing-remitting multiple sclerosis. The earn-out also includes an interest in Fumaderm, a therapeutic approved in Germany for the treatment of moderate to severe plaque psoriasis.

The borrower of the loan is RPI Finance Trust.

Royalty Pharma is a New York-based acquirer of royalty interests in marketed and late-stage biopharmaceutical products.

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