Mylan obtains $11.06 billion bridge facility for proposed Perrigo buy

By Toni Weeks

San Luis Obispo, Calif., April 24 – Mylan NV obtained a new bridge credit facility on Friday with Goldman Sachs Bank USA as administrative agent, bookrunner and lead arranger to finance the cash portion of the consideration for its proposed acquisition of Perrigo Co. plc.

According to a press release, the company is seeking to acquire Perrigo for $60 in cash and 2.2 Mylan ordinary shares per each Perrigo share. As Perrigo has rejected Mylan’s earlier proposal, Mylan has begun a legally binding process under the Irish Takeover Rules to commence its offering.

The bridge credit agreement provides for a bridge credit facility under which the company may borrow up to a total amount of $11,059,000,000, according to an 8-K filing with the Securities and Exchange Commission.

The credit facility is comprised of an $8.76 billion tranche A loan, an $800 million tranche B loan and a $1,499,000,000 tranche C loan.

The proceeds of the tranche A and tranche C loans will be used solely to finance the acquisition and repay Perrigo’s outstanding term loans as well as other costs associated with the acquisition. The tranche B loan will be applied, if necessary, to prepay the existing term credit agreement and to pay related fees and expenses.

The loan commitments are available until April 22. The tranche A and tranche B loans mature 364 days after the loans are funded, and the tranche C loans mature six months after the loans are funded.

The loans are due at maturity and may be prepaid without penalty or premium, other than customary breakage costs related to repayments of Libor borrowings.

Borrowings initially bear interest at Libor plus 150 basis points. The margin over Libor can fluctuate from 112.5 bps to 222.5 bps based on the company’s long-term unsecured senior, non-credit-enhanced debt rating.

The company will pay to each lender a ticking fee equal to 0.175% of each lender’s commitments. The fee will accrue from May 24 onward for tranche A and tranche C loans and from June 8 onward for tranche B loans, until the earlier of the date the loans are funded and the date the commitments terminate.

If the tranche A and/or tranche B loans are funded, Mylan will pay to each lender duration fees equal to 0.5%, 0.75% and 1% of the principal amount of tranche A loans and tranche B loans of each lender that are outstanding on the 90th, 180th and 270th day, respectively, after the loans are funded.

The loans will be unsecured and guaranteed by Mylan Inc., each subsidiary of the company that guarantees or is a co-obligor of third-party debt in excess of $350 million and, following completion of the proposed acquisition, Perrigo. As of April 24, no subsidiary of the company other than Mylan Inc. is required to provide a guarantee.

The agreement contains a financial covenant requiring maintenance of a maximum ratio of 4.75 to 1.00 for consolidated total debt as of the end of any quarter to consolidated EBITDA for the trailing four quarters.

Mylan is a pharmaceutical company based in Herts, England.

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