Valeant Pharmaceuticals, Lions Gate Entertainment, Ferrara Candy break; Fortescue weakens

By Sara Rosenberg

New York, March 13 – Valeant Pharmaceuticals International Inc.’s new term loans surfaced in the secondary market on Friday, with the term F borrowings quoted above par, and Lions Gate Entertainment Corp. and Ferrara Candy Co. began trading as well.

In more trading happenings, Fortescue Resources’ term loan was softer as commitments for the term loan extension were due.

Switching to the primary market, Townsquare Media Inc. revealed timing and structure on its proposed credit facility, and ViaWest disclosed price talk on its in market term loan B.

Valeant starts trading

Valeant Pharmaceuticals’ term debt broke for trading on Friday, with the strip of $2.35 billion seven-year senior secured first-lien term loan F-1 and $1.8 billion seven-year senior secured first-lien delayed-draw term loan F-2 debt quoted at par 1/8 bid, par 3/8 offered, according to a trader.

Pricing on the F-1 and F-2 loans is Libor plus 325 basis points with a step-down to Libor plus 300 bps at 1.75 times net senior secured leverage and a 0.75% Libor floor. The debt was issued at an original issue discount of 99½, and has 101 soft call protection for six months as well as a ticking fee of the spread plus the floor starting 30 days from allocations.

Recently, the total amount of term F debt was reduced to $4.15 billion from $4.55 billion as the company’s bond offering was increased to $10 billion equivalent from $9.6 billion, pricing was trimmed from Libor plus 350 bps and the discount was tightened from 99.

Along with the term F loans, the company is getting a $1 billion incremental five-year term loan A.

Valeant lead banks

Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., the Bank of Tokyo-Mitsubishi UFJ Ltd., DNB Markets Inc., SunTrust Robinson Humphrey Inc., Barclays, Morgan Stanley Senior Funding Inc., RBC Capital Markets and Citigroup Global Markets Inc. are leading the $5.15 billion of incremental term loan debt (Ba1/BB).

Proceeds from the loans will be used with the bonds and cash on hand to fund the acquisition of Salix Pharmaceuticals Ltd. for $158.00 per share in cash, or a total enterprise value of about $14.5 billion, repay Salix’s existing credit facility, redeem Salix’s 6% senior notes due 2021 and pay any cash consideration necessary upon the conversion of Salix’s 1.5% convertible senior notes due 2019 and 2.75% convertible senior notes due 2015.

Closing is expected in the second quarter, subject to customary conditions and regulatory approval.

Net debt to adjusted pro forma EBITDA will be around 5.6 times.

Valeant is a Laval, Quebec-based specialty pharmaceutical company. Salix is a Raleigh, N.C.-based developer and marketer of prescription pharmaceutical products and medical devices for gastrointestinal diseases.

Lions Gate tops par

Lions Gate Entertainment’s $375 million second-lien term loan hit the secondary, too, with levels seen at par 1/8 bid, par 5/8 offered, a trader said.

Pricing on the loan is a fixed-rate of 5%, and it was issued at par. The debt is non-callable for one year, then at 102 in year two and 101 in year three.

During syndication, the second-lien term loan was upsized from $250 million.

J.P. Morgan Securities LLC is leading the deal that will be used to refinance an existing second-lien term loan, and, as a result of the upsizing, to pay down revolver borrowings.

Lions Gate is a Santa Monica, Calif.-based entertainment company in motion picture production and distribution, television programming and syndication, home entertainment, family entertainment, digital distribution and new channel platforms.

Ferrara Candy frees up

Ferrara Candy’s fungible $40 million add-on first-lien covenant-light term loan (B) due June 2018 allocated, and post-add-on, the company’s first-lien term loan debt was quoted at 98½ bid, 99¼ offered in trading, a trader remarked.

Pricing on the add-on term loan is Libor plus 625 bps with a 1.25% Libor floor, and it was sold at an original issue discount of 98.

Morgan Stanley Senior Funding Inc. is leading the deal that will be used to pay down ABL credit facility borrowings.

Ferrara Candy is a confectionery and candy manufacturer.

Fortescue retreats

Also in trading, Fortescue Resources’ term loan fell to 91 bid, 91¾ offered from 91½ bid, 92½ offered ahead of Friday’s commitment deadline for the extension of the debt, according to a trader.

Under the proposal, the company is looking to extend its $4,888,000,000 term loan to 2022 from June 30, 2019 and is talking the extended debt at Libor plus 425 bps to 450 bps with a 1% Libor floor, a par offer price and a 25 bps extension fee.

In addition, the East Perth, Australia, iron ore producer is seeking a new $2.5 billion seven-year term loan talked at Libor plus 425 bps to 450 bps with a 1% Libor floor and an original issue discount of 99, and commitments for this debt are due on Wednesday.

The extended and the new term loan will have 101 soft call protection for one year.

Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are leading the financing.

Proceeds from the new term loan will be used to refinance unsecured notes.

Townsquare details emerge

Over in the primary market, Townsquare Media disclosed timing on the launch of its senior secured credit facility, with the bank meeting set to take place at 9:30 a.m. ET on Tuesday, according to a market source.

Also, it was revealed that the credit facility is sized at $305 million, split between a $50 million five-year revolver and a $255 million seven-year term loan B, the source said.

Previously, all that was known on the deal was that the company would be launching a credit facility sometime this month.

RBC Capital Markets LLC, Bank of America Merrill Lynch, SunTrust Robinson Humphrey Inc., Macquarie Capital (USA) Inc. and Jefferies Finance LLC are leading the credit facility that will be used with new senior unsecured notes to refinance the company’s existing senior secured credit facility and $410.9 million of 9% senior notes due 2019 issued by Townsquare Radio LLC and Townsquare Radio Inc.

Townsquare Media is a Greenwich, Conn.-based diversified media and entertainment and digital marketing services company.

ViaWest releases talk

ViaWest came out with talk of Libor plus 375 bps to 400 bps with a 1% Libor floor, an original issue discount of 99 and 101 soft call protection for six months on its $375 million seven-year term loan B, a market source remarked.

The company’s $450 million senior secured credit facility (B2/B+), which launched with a bank meeting on Thursday, also includes a $75 million five-year revolver.

Commitments are due on March 25, the source added.

TD Securities (USA) LLC and RBC Capital Markets are leading the deal that will be used to refinance existing debt.

ViaWest is a Greenwood Village, Colo.-based IT Infrastructure solutions company.

BATS closes

In other news, BATS Global Markets Inc. completed its acquisition of Hotspot FX from KCG Holdings, according to a news release.

To help fund the transaction, BATS got a new $150 million three-year term loan and a fungible $228 million add-on term loan, with both tranches having 101 soft call protection for one year.

Pricing on the three-year term loan is Libor plus 375 bps with no Libor floor, and it was sold at an original issue discount of 99. The add-on term loan is priced at Libor plus 475 bps with a 1% Libor floor and was sold at a discount of 99.

During syndication, the three-year term loan was downsized from $250 million and the discount widened from 99½, and the add-on term loan was upsized from $128 million.

J.P. Morgan Securities LLC led the $378 million of term debt (BB-).

BATS is a Kansas City, Mo.-based operator of securities markets. Hotspot is a Jersey City, N.J.-based institutional spot foreign exchange market.

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