Royalty Pharma widens discount on $500 million add-on term loan to 98½

By Sara Rosenberg

New York, May 23 - Royalty Pharma revised the original issue discount on its $500 million add-on term loan (Baa2/BBB-) due 2018 to 98½ from earlier talk of 99 to 991/2, 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.

In addition, the company is no longer looking to amend its existing credit agreement to revise the accordion, the source said.

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

Commitments were due at 5 p.m. ET on Wednesday, the source added.

Closing is expected to occur during the week of May 28.

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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