By Paul A. Harris
St. Louis, Feb. 13 - Axcan Intermediate Holdings Inc., in a restructured leveraged buyout financing, priced a $228 million issue of 9½% seven-year senior secured notes (Ba2/BB-) at 98.737 to yield 9½% on Wednesday, according to informed sources.
However, Axcan withdrew from the market a proposed $235 million tranche of eight-year senior unsecured notes (B3/B-), which had been downsized from $240 million. Instead of placing the unsecured notes, the underwriters funded the bridge loan backing them.
A source told Prospect News that the unsecured notes could re-emerge pending market conditions.
The secured notes priced wide of the price talk, which had them coming with a 9% coupon at a discount to yield 9¼%.
Earlier in the week, Axcan restructured its $750 million LBO financing by upsizing the bond portion to $460 million from $240 million, mostly with the addition of the senior secured notes.
In doing so the company eliminated a proposed $385 million institutional term loan B, replacing it with the senior secured notes and a new $165 million term loan A.
The bank facility also includes a $125 million revolving credit facility.
Banc of America Securities LLC was the left lead bookrunner for the Rule 144A with registration rights notes. HSBC and RBC Capital Markets are joint bookrunners.
Proceeds will be used to help fund the buyout of Axcan by TPG Capital, which is set to close by the end of the first quarter of 2008.
Mont-Saint-Hilaire, Quebec-based Axcan Pharma is a specialty pharmaceutical company focused on gastroenterology, with operations in North America and Europe.
| Issuer: | Axcan Intermediate Holdings Inc.
|
| Face amount: | $228 million
|
| Proceeds: | $225.1 million (approximate)
|
| Maturity: | March 1, 2015
|
| Security description: | Senior secured notes
|
| Bookrunners: | Banc of America Securities LLC, HSBC, RBC Capital Markets
|
| Coupon: | 9¼%
|
| Price: | 98.737
|
| Yield: | 9½%
|
| Spread: | 627 bps
|
| Call features: | Callable on March 1, 2011 at 106.938, 104.625, 102.313, par on and after March 1, 2014
|
| Equity clawback: | Until March 1, 2011 for 35% at 109.25
|
| Trade date: | Feb. 13
|
| Settlement date: | Feb. 25
|
| Ratings: | Moody's: Ba2
|
| Standard & Poor's: BB-
|
| Distribution: | Rule 144A with registration rights/Regulation S
|
| Price talk: | 9% coupon at a discount to yield 9¼%
|
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