Mallinckrodt International lifts term loan amount to $700 million

By Sara Rosenberg

New York, July 28 – Mallinckrodt International Finance SA upsized its senior secured covenant-light term loan (Ba2/BB+) due March 19, 2021 to $700 million from $500 million, according to market source.

As a result of the term loan upsizing, the company’s $250 million cash bridge facility was eliminated from the transaction, the source said.

The term loan, which is not fungible with the company’s existing term loan, is still talked at Libor plus 275 basis points to 300 bps with a 0.75% Libor floor, an original issue discount of 99˝ and 101 soft call protection for six months.

Commitments continued to be due at 5 p.m. ET on Tuesday, the source added.

Barclays, Deutsche Bank Securities Inc., Citigroup Global Markets Inc. and Wells Fargo Securities LLC are the bookrunners on the deal, and Mizuho Securities USA Inc., PNC Capital Markets LLC and SunTrust Robinson Humphrey Inc. are the co-managers.

Proceeds will be used to help fund the acquisition of Questcor Pharmaceuticals Inc. for $30.00 per share in cash and 0.897 Mallinckrodt shares for each share of Questcor common stock, for a total consideration of about $86.10 per Questcor share. The transaction is valued at about $5.6 billion.

Other funds for the transaction will come from a $900 million senior notes offering.

Closing is expected in the third quarter, subject to the approval of the shareholders of both companies and Hart-Scott-Rodino clearance.

Mallinckrodt is a Dublin-based pharmaceutical company. Questcor is an Anaheim Hills, Calif.-based biopharmaceutical company.

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