UBS is in the market with an amended and restated facility for Herbalife International that cuts pricing on the company's $104.8 million credit by 1%. The facility needs to be amended to allow for an offering of $275 million senior unsecured notes that are being issued by WH Holdings as part of a recapitalization.
The company repaid $60 million of the existing credit facility and is planning to repay $40 million more shortly. "Liquidity is up, deleveraging has been successful and the credit ratings have been upgraded," a source familiar with the company said.
The bank facility comprises a $25 million revolver and $79.8 million term loan. Price talk on the term loan is LIBOR plus 3%, down from LIBOR plus 4%. The revolver is being talked at LIBOR plus 21/2%, down from LIBOR plus 31/2%.
Proceeds from the notes offering are being used to buy back $220 million of preferred stock and $52 million of senior notes that provided the equity capital as part of Herbalife's LBO in 2002 (LMW, 6/3). Herbalife markets dietary and nutritional supplements. Bill Lowe, Herbalife's senior v.p. of finance, declined comment.