Sucampo breaks; Valeant dips on numbers; Electronic Funds rises; Weight Watchers skyrockets

By Sara Rosenberg

New York, Oct. 19 – Sucampo Pharmaceuticals Inc.’s term loan B began trading on Monday, with levels quoted above its original issue discount, and Valeant Pharmaceuticals International Inc.’s term loans C, D and E moved lower with the release of quarterly numbers.

Also in the secondary market, Electronic Funds Source LLC’s term loans were stronger as the company revealed that it is being acquired by WEX Inc. and Weight Watchers International Inc.’s term loans headed higher with news of an equity investment by Oprah Winfrey.

Moving to the primary market, Concordia Healthcare Corp. set pricing on its U.S. and sterling term loans at the high end of guidance, widened original issue discount talk on the tranches and extended the call protection, Raycom TV upsized its add-on term loans, and American Commercial Lines Inc. released details on its debt financing with launch.

Sucampo frees up

Sucampo Pharmaceuticals’ $250 million senior secured term loan B (B3/B) allocated and broke for trading on Monday, with levels quoted at 97¼ bid, 97¾ offered, according to a trader.

Pricing on the term loan B is Libor plus 725 basis points with a 1% Libor floor, and it was sold at an original issue discount of 97. The debt has hard call protection of 102 in year one and 101 in year two.

During syndication, the spread on the loan was lifted from Libor plus 700 bps and the discount was revised from 98.

Jefferies Finance LLC is leading the deal that will be used with cash on hand to fund the acquisition of R-Tech Ueno, a Tokyo-based pharmaceutical company, for ¥33 billion, or about $278 million, inclusive of around $54 million in cash and 2.5 million Sucampo shares, held by R-Tech Ueno.

Closing is expected on Oct. 20, subject to the minimum acceptance threshold in a tender offer, regulatory approvals and other customary conditions.

Sucampo, a Bethesda, Md.-based pharmaceutical company. R-Tech Ueno is, will have total debt to combined adjusted EBITDA of 2.9 times and total net debt to combined adjusted EBITDA of 1.5 times.

Valeant slides

In more trading happenings, Valeant Pharmaceuticals’ term loans C, D and E softened in connection with the company’s release of third quarter results, a trader said.

The term loan C and D were quoted at 97 3/8 bid, 97 5/8 offered, down from 97 5/8 bid, 98 1/8 offered, and the term loan E was quoted at 97 3/8 bid, 97 5/8 offered, down from 97½ bid, 98 offered, the trader said. The company’s term loan F was seen at 97 7/8 bid, 98 1/8 offered, relatively unchanged from Friday’s levels of 97 7/8 bid, 98 3/8 offered.

For the third quarter, net income was $51.7 million, or $0.14 per diluted share, down from $276.4 million, or $0.81 per diluted share, in the third quarter of 2014.

And, revenues for the quarter were about $2.79 billion, up from about $2.06 billion in the prior year.

Valeant is a Laval, Quebec-based specialty pharmaceutical company.

Electronic Funds gains ground

Electronic Funds Source’s first-lien term loan rose in the secondary to par bid, 100¼ offered from 98 bid, 99 offered and its second-lien term loan strengthened to 101¼ bid, 101¾ offered from 96 bid, 97 offered after the company said that it is being bought by WEX, a trader remarked.

Under the agreement, the company is being acquired for about $1.1 billion in cash and 4 million shares of common stock to be issued to investment funds affiliated with Warburg Pincus, Electronic Funds’ current owner.

To finance the purchase and refinance existing bank debt, WEX has received a commitment for a $2,125,000,000 senior secured credit facility comprised of a $350 million five-year revolver and a $1,775,000,000 seven-year term loan, led by Bank of America Merrill Lynch, SunTrust Robinson Humphrey Inc. and MUFG Union Bank.

Closing on the acquisition is subject to regulatory approvals and other customary conditions.

WEX is a South Portland, Maine-based provider of corporate payment solutions. Electronic Funds is a provider of payments solutions.

Weight Watchers rallies

Weight Watchers’ term loans jumped up in trading by a substantial amount following an announcement that Oprah Winfrey is making an equity investment in the company and is joining the Board of Directors, according to traders.

The B-2 loan was quoted by one trader at 75 bid, 76 offered, up from 57 bid, 58 offered, and by a second trader at 75½ bid, 77½ offered, up from 57 bid, 58 offered.

And, the term loan B-1 was quoted by a trader at 96½ bid, 98½ offered, up from 90 bid, 92 offered.

Under the agreement, Winfrey will purchase newly issued shares representing 10% of the shares outstanding and will receive options to acquire an additional 5% of the fully diluted shares.

The shares are being purchased for $6.79 per share for an aggregate purchase price of about $43.2 million.

Weight Watchers is a New York-based provider of weight management services.

Concordia reworks loans

Meanwhile, in the primary market, Concordia Healthcare firmed pricing on its $1.1 billion six-year term loan at Libor plus 425 bps, the high end of the Libor plus 400 bps to 425 bps talk, set pricing on its £500 million six-year term loan at Libor plus 475 bps, the wide end of the Libor plus 450 bps to 475 bps talk, and modified original issue discount talk on the tranches to 93.5 to 94.5 from 99, according to a market source.

Additionally, both term loans saw their 101 soft call protection pushed out to one year from six months, amortization adjusted to 1% year one, 2.5% in years two and three, and 5% per annum thereafter, the MFN sunset eliminated and the incremental allowance reduced to $250 million from $500 million, the source said.

Both term loans still have a 1% Libor floor.

Earlier in syndication, the maturities of the term loans were shortened from seven years.

The company’s roughly $2,075,000,000 secured credit facility (B+) also includes a $200 million revolver.

Commitments are due at noon ET on Tuesday, the source added.

Concordia lead banks

Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC, Jefferies Finance LLC and RBC Capital Markets are leading Concordia’s credit facility that will be used to help fund the acquisition of Amdipharm Mercury Ltd. from Cinven and to refinance all of Amdipharm’s and Concordia’s existing bank debt.

Amdipharm is being bought for about $3.5 billion, consisting of cash consideration of about $1.2 billion, 8.49 million common shares of Concordia and the assumption of around $1.4 billion Amdipharm net debt upon closing, as well as a maximum performance-based earn-out of around $220 million payable in cash in the fourth quarter of 2016.

Other funds for the transaction are expected to come from $180 million in bridge loans, $790 million of seven-year senior unsecured debt coming as bonds and/or loans, $520 million of proceeds raised from a recent public equity offering and cash on hand.

Closing is targeted for Oct. 21, subject to customary conditions.

Concordia is an Oakville, Ont.-based health care company focused on legacy pharmaceutical products and orphan drugs. Amdipharm is a London-based pharmaceutical company.

Raycom TV upsizes

Raycom TV raied its add-on term loan A to $160 million from $100 million and its add-on covenant-light term loan B to $90 million from $70 million, a market source said.

As before, the add-on term loan B is priced at Libor plus 300 bps with a 0.75% Libor floor, in line with the existing term loan B, and is offered at an original issue discount of 99.

Wells Fargo Securities LLC, Bank of America Merrill Lynch and J.P. Morgan Securities LLC are leading the now $250 million deal that will be used to fund the acquisition of television stations from Drewry Communications and Hoak Media.

Raycom is a Montgomery, Ala.-based broadcaster and owner and operator of television stations.

American Commercial launches

American Commercial Lines held its bank meeting on Monday, launching $1.3 billion in term loans split between a $1.1 billion seven-year first-lien covenant-light term loan (B2) and a $200 million 7.5-year second-lien covenant-light term loan (Caa1), a market source said.

Talk on the first-lien term loan is Libor plus 600 bps to 625 bps with a 1% Libor floor, an original issue discount of 98 and 101 soft call protection six months, and talk on the second-lien term loan is Libor plus 925 bps with a 1% Libor floor, a discount of 96 to 97 and call protection of 103 in year one, 102 in year two and 101 in year three, the source continued.

Commitments are due at noon ET on Oct. 30.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Goldman Sachs Bank USA and UBS AG are leading the deal that will fund the roughly $550 million acquisition of AEP River Operations, a Chesterfield, Mo.-based commercial inland barge company, from American Electric Power, and refinance existing debt.

Closing is expected in the fourth quarter, subject to regulatory approval and other conditions.

American Commercial is a Jeffersonville, Ind.-based marine transportation service company.

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