Forest Laboratories seals $750 million five-year revolving commitments

By Susanna Moon

Chicago, Dec. 7 - Forest Laboratories, Inc. obtained commitments for a $750 million five-year revolving credit facility at Libor plus 125 basis points.

The spread over Libor is 125 bps to 200 bps based on leverage. The unused fee ranges from 15 bps to 30 bps.

The company and some of its foreign subsidiaries closed the unsecured facility on Tuesday with J.P. Morgan Securities LLC and Fifth Third Bank as bookrunners and lead arrangers, according to an 8-K filing with the Securities and Exchange Commission.

JPMorgan Chase Bank, NA as administrative agent. Fifth Third Bank is syndication agent. Bank of America, NA; Credit Suisse AG, Cayman Islands Branch; Morgan Stanley Senior Funding, Inc.; U.S. Bank NA and the Governor and Co. of the Bank of Ireland are the co-documentation agents.

The company may request up to $250 million of incremental commitments in term loans or a boost to the revolving commitments.

Proceeds will be used to finance the company's working capital needs and for general corporate purposes, including product and other acquisitions.

Covenants require the company to maintain a maximum leverage ratio of no more than 3.25 times and a minimum interest coverage ratio of at least 3 times.

The credit agreement expires on Dec. 4, 2017 and replaces the company's $500 million revolving credit facility set to expire on Dec. 7. There was nothing drawn under the previous credit agreement.

The company had not drawn on the new facility as of Friday.

Forest Laboratories is a New York-based pharmaceutical company.

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