Capsugel inks add-on to PIK-toggle notes (B-/Caa1) at 101.75; backs refi, sponsor dividend

Capsugel this afternoon completed an add-on to its 7%/7.75% holdco PIK-toggle notes due 2019, via joint bookrunners Citi, Barclays, Deutsche Bank, KKR, Mizuho, SMBC, and UBS. Terms were finalized at the tight end of talk. Proceeds, along with those from a €355 million covenant-lite term loan, will be used to fully refinance the drug-capsule manufacturer’s €325 million issue of 9.875% notes due 2019, and fund a sponsor dividend. Commitments on the loans were accelerated to 5:00 p.m. EDT today, from July 28. Price talk is E+300, with a 1% Euribor floor and a 99.75 offer price. The issuer is also seeking to boost its revolving credit facility to $175 million, from $150 million, and extend the maturity by three years, to 2019, with a springing maturity to its 2018 term debt. Capsugel makes hard capsules and drug-delivery systems.


Issuer Capsugel
Ratings B-/Caa1
Amount $415 million
Issue senior holdco PIK-toggle add-on (144A-life)
Coupon 7% cash/7.75% PIK
Price 101.75
Yield 6.16%
Spread T+446
Maturity May 15, 2019
Call nc4mos @102
Trade July 24, 2014
Settle July 31, 2014 (T+5)
Bookrunners Citi/Barc/DB/KKR/MIZ/SMBC/UBS
Price talk 101.5 area



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