UBS launched syndication last week for the $160 million credit backing drug development company SFBC International's $245 million acquisition of PharmaNet. The credit comprises a $20 million revolver and $140 million "B" loan. Pricing is expected to be in the LIBOR plus 3% range, market sources noted. The revolver matures in five years, while the "B" loan has a tenor of six years. A UBS banker declined comment and a SFBC spokeswoman did not return calls.
While the company has had historically low levels of free cash flow, it is expected to generate more going forward, according to Paul Bienstock, v.p. senior analyst with Moody's Investors Service. The company has recently expanded and improved facilities, which has translated into strong revenue growth, Moody's notes. "They've made investments so they don't need as much capacity going forward," Bienstock said. "They can handle future growth with very incremental capital."