Horizon ups term B to $1.6 billion, sets spread at Libor plus 200 bps

By Sara Rosenberg

New York, Feb. 25 – Horizon Therapeutics USA Inc. lifted its seven-year senior secured covenant-lite term loan B (Ba1/BB+) to $1.6 billion from $1.3 billion and firmed pricing at Libor plus 200 basis points, the low end of the Libor plus 200 bps to 225 bps talk, according to a market source.

In addition, the original issue discount on the term loan was changed to 99.75 from 99.5, the source said.

The term loan still has a 25 bps step-down at 2x total net leverage with cash netting capped at $50 million, a 0.5% Libor floor and 101 soft call protection for six months.

Citigroup Global Markets Inc., Morgan Stanley Senior Funding Inc. and J.P. Morgan Securities LLC are the joint lead arrangers on the deal. Citigroup is the administrative agent.

Recommitments were scheduled to be due at 5 p.m. ET on Thursday, the source added.

Proceeds will be used with balance sheet cash to fund the acquisition of Viela Bio Inc. for $53.00 per share in cash, which represents a fully diluted equity value of $3.05 billion, or around $2.67 billion net of Viela Bio’s cash and cash equivalents. The extra funds raised from the term loan upsizing will be put as cash on the balance sheet for general corporate purposes.

Closing is expected in mid-March.

Horizon is a Dublin-based researcher and developer of medicines that address critical needs for people impacted by rare and rheumatic diseases. Viela Bio is a Gaithersburg, Md.-based biotechnology company dedicated to the discovery, development and commercialization of novel treatments for autoimmune and severe inflammatory diseases.

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