Deutsche Bank launched a reprice for Warner Chilcott's $1.64 billion term loan last Monday. The pharmaceutical company is looking to cut pricing to LIBOR plus 2% from LIBOR plus 2 1/4%, according to a banker. Commitments are due today.
The original deal, led by DB, Credit Suisse, JPMorgan and Morgan Stanley, struggled. There was buysider pushback last April when the Rockaway, N.J.-based company originally tried to cut pricing 50 basis points from LIBOR plus 2 3/4% to LIBOR plus 2 1/4% (CIN, 4/24). The banks eventually modified the reprice, settling the term loan at LIBOR plus 2 1/2% with a step down to LIBOR plus 2 1/4% if the debt was rated B+/B1 or better or the company's total leverage fell to 5.75 times or less.
When Moody's Investors Service introduced its new ratings for nine pharmaceutical companies in September, using its new probability-of-default and loss-given-default rating methodology, the company's debt was bumped up from B2 to B1, according to a Sept. 21 release. As of Sept. 30, the company's leverage was below 5.75 times, according to a company spokeswoman. She suggested this triggered the pricing step-down, which occurred Nov. 10. Both the spokeswoman and Paul Herendeen, cfo, declined to comment on the reprice.