Merrill Lynch and Bank of America launched and fully subscribed the bank deal for Advanced Medical Optics last week. The loan, which facilitates the spin-off of the business from Allergan, is significant as it is completely new money rather than a re-pricing or refinancing, said a banker. Merrill and B of A bankers declined to comment.
The bank deal is split between a six-year, $100 million "B" term loan and a five-year, $40 million revolver. Pricing on the revolver is LIBOR plus 3% while the "B" piece is offering LIBOR plus 31/ 2%, said a banker, who could not say whether a flex would be introduced.
Buysiders raised concerns over the asset coverage, with one noting, "This could go to 20 in a distressed scenario." But bankers said the cash flow is very steady and the business has high barriers to entry. Ratings are B1/BB- for the bank debt (see Credit in Focus, page 6).