Organon reworks U.S. and euro term loan B sizes, cancels term loan A

By Sara Rosenberg

New York, April 8 – Organon & Co. upsized its U.S. seven-year term loan B to $3 billion from $2 billion, downsized its euro seven-year term loan B to €750 million from $1 billion equivalent and eliminated plans for a $2 billion term loan A, according to a market source.

Also, the original issue discount on the U.S. and euro term loans firmed at 99.5, the tight end of the 99 to 99.5 talk, the source said.

Pricing on the U.S. term loan remained at Libor plus 300 basis points with a 0.5% Libor floor and pricing on the euro term loan remained at Euribor plus 300 bps with a 0% floor.

Both term loans have 101 soft call protection for six months.

JPMorgan Chase Bank, Morgan Stanley Senior Funding Inc., BofA Securities Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA and HSBC Securities (USA) Inc. are the leads on the deal.

Proceeds will be used to help fund the creation of the company through the spinoff of Merck’s women’s health, legacy brands and biosimilars businesses.

Other funds for the transaction will come from $2.1 billion of senior secured notes, upsized from $2 billion, €1.25 billion of senior secured notes, upsized from $1 billion equivalent, and $2 billion of senior unsecured notes, upsized from $1.5 billion.

The upsizing of the U.S. term loan B and the notes allowed for the cancellation of the term loan A.

Organon is a Jersey City, N.J.-based pharmaceutical company that develops and delivers health solutions through a portfolio of prescription therapies within women’s health, biosimilars and established brands.

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