Credit Suisse, JPMorgan and Scotia Capital are in the market with a $1.2 billion credit for Weight Watchers International that the company will use to repurchase shares. The deal consists of a six-year, $700 million tack-on to an existing $350 million "A" term loan it entered into in May. There is also a new seven-year, $500 million "B" term loan. Pricing is LIBOR plus 1 1/2% on the term loan "B" and LIBOR plus 1 1/4% on the revolver and term loan "A," according to the commitment letter filed with the Securities and Exchange Commission.
Along with the existing "A" term loan the banks syndicated last May, JPMorgan and Scotia Capital also led a $500 million revolver, of which $25 million is available in a letter of credit facility. The existing credit was priced at LIBOR plus 87 basis points, according to SEC filings. New York-based Weight Watchers is using the new debt to repurchase shares from Artal Holdings, its majority shareholder. New York-based Invus Group acts as Artal's investment advisor. A transaction price could not be determined. The company has also commenced a modified Dutch auction self-tender offer for 8.3 million shares, which will also be used to fund the share repurchase. A call to Ann Sardini, cfo, was not returned. Moody's Investors Service assigned a Ba1 to the proposed facility.
Credit Suisse led a $220 million credit for WeightWatchers.com, the Web site for Weight Watchers International, in November 2005 (CIN, 11/4/2005). The deal consisted of a five-year, $170 million term loan "B" and a five-and-a-half-year, $45 million second-lien term loan. The first lien was priced at LIBOR plus 2 1/4% and the second lien at LIBOR plus 4 3/4%.