UBS Warburg has done an about-face on Herbalife International by canceling a Euro 100 million bond sale after investors pushed for too high of a yield. Instead, the $165 million "B" term loan has been upsized to $180 million and the $150 million U.S. bond portion has been bulked up to $165 million.
Believing the high-yield market in Europe would be receptive, UBS downsized the "B" loan to $160 million and cancelled a $17 million mezzanine tranche at the holding company level to make room for the Euro offering (LMW, 6/19). However, bond investors recently have turned colder on new issues, bankers said. Pointing to the Buffet's bond deal, which was trimmed back by $30 million after investors demanded a steep yield, one banker said the bond market clearly has turned a bit.
The "B" loan was oversubscribed in syndication, so there will be no need to bring in new participants, a banker said, noting that pricing on the "B" remains at LIBOR plus 4%. Herbalife's new $25 million revolver will stay in place, and the $17 million of mezzanine debt has been revived and upsized to $25 million. The deal is expected to close in mid-July.