Phibro Animal Health enters $500 million term A loan, revolver

By Marisa Wong

Morgantown, W.Va., June 29 – Phibro Animal Health Corp. entered into a credit agreement for $250 million of term A loans and a $250 million revolver on Thursday, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America Merrill Lynch and Rabobank are the joint lead arrangers and joint bookrunners with Bank of America, NA as administrative agent.

At closing, the company drew the full amount of the term A loan and $64.1 million of the revolver.

The credit facilities replace the company’s previous revolving credit facility and term B loan. The company used amounts borrowed at closing to retire amounts outstanding under the previous revolver and term B loan.

The company said it expects its consolidated statements of operations for the three months and year ending June 30 to include a loss on extinguishment of debt of about $2.5 million in connection with the repayment.

The new facilities mature on June 29, 2022.

The term A loans are repayable in quarterly installments of $1,562,500 initially with gradual step-ups to $6.25 million and the balance payable at maturity.

Borrowings bear interest at Libor plus an applicable rate based on the company’s first-lien net leverage ratio. The applicable rate for both the revolver and term A loan ranges from 150 basis points to 200 bps, compared to 250 bps to 300 bps under the prior revolver and 300 bps under the term B loan.

The initial rate is Libor plus 175 bps.

The commitment fee ranges from 20 bps to 30 bps, also based on the first-lien net leverage ratio. The initial fee is 25 bps.

The credit facilities contain financial and other covenants, including a requirement to maintain specified leverage ratios.

Phibro is a Teaneck, N.J.-based animal health and mineral nutrition company.

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