Royalty Pharma increases add-on term loan size to $600 million

By Sara Rosenberg

New York, May 24 - Royalty Pharma raised its add-on term loan (Baa2/BBB-) to $600 million from $500 million, according to a market source.

Pricing on the loan due 2018 is Libor plus 300 basis points with a 1% Libor floor, in line with existing 2018 term loan pricing, and it was sold at an original issue discount of 981/2.

The discount widened earlier this week from talk of 99 to 991/2.

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

Closing is expected to occur next week.

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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