Quintiles Transnational Corp.'s first lien and second-lien term loans broke in the secondary market last week. The first lien, which was increased to $1 billion from $900 million, broke at 101. The second lien, which was downsized to $220 million from $320 million, broke at 102. A banker said high demand for the loan enabled the company to increase the size of the cheaper first lien. The first lien is priced at LIBOR plus 2%, while the second lien is priced at LIBOR plus 4%.
Citigroup leads the financing, which will be used to pay off the company's notes and preferred stock of its parent company, Pharma Services Holding. Moody's Investors Service assigned a B1 rating to the first and second-lien loans. It also assigned a B1 corporate family rating. The ratings agency said in a report that the increase in leverage from the refinancing and limited free cash flow relative to debt resembles that of a company rated B2, leaving Quintiles weakly positioned in the B1 rating category. A spokesman for Quintiles did not return calls.