Following a hefty initial public offering and some stellar gains this year, Weight Watchers International is refinancing its bank debt via administration agent Bank of Nova Scotia and lead arranger Credit Suisse First Boston. The company, described in a September 10-Q as significantly leveraged, has improved its profile since a successful IPO in November and is looking to trim its borrowing spread, said a banker familiar with the deal. The company's $418 million IPO tipped the scales as the largest IPO of the month.
Launched via a conference call on Dec. 4, the six-year term loan "B" is priced at LIBOR plus 3%. The current term loan "B" has a LIBOR plus 4% spread. Calls to Weight Watchers spokeswoman Linda Carilli were not returned. The bank debt is rated BB-/Ba1. According toStandard & Poor's, high debt-levels are offset by the firms strong brand name and position. Favorable demographic factors such as increasingly sedentary lifestyles, an aging population and an increasing percentage of adults worldwide who are overweight or obese should help the growth in the weight-control industry, according to S&P.