Royalty Pharma upsizes to $3.4 billion, tightens term loan pricing to Libor plus 250 bps

By Paul A. Harris

Portland, Ore., Oct. 4 – Royalty Pharma Investments Finance Trust upsized its six-year term loan B-5 (Baa2/BBB-) to $3.4 billion from $705 million, according to a market source.

Pricing tightened to Libor plus 250 basis points from earlier talk of 250 bps to 275 bps. As before, the deal, which comes with no Libor floor, is set to come at an original issue discount of 99.5.

Bank of America Merrill Lynch, Goldman Sachs Bank USA and J.P. Morgan Securities LLC are the lead arrangers on the deal.

The term loan has 101 soft call protection for six months and total leverage and fixed charge coverage tests.

Proceeds will be used to refinance existing debt, including a term loan B-3 due in 2018. With the upsizing, Royalty Pharma will refinance its term loan B-4, sources said.

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

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