UPDATE:Grifols To Raise $1B From Junk Bonds For Talecris Buy-Sources

8th Jul 2010 15:02

(Adds detail, background) By Carol Dean Of Dow Jones Newswires LONDON (Dow Jones)--Spanish healthcare company Grifols SA (GRF.MC) plans to raise up to $1.1 billion in the high yield bond market to back its acquisition of U.S. company, Talecris Biotherapeutics Holdings Corp. (TLCR), people familiar with the situation said Thursday. Grifols has lined up debt totaling $4.5 billion, of which $1.1 billion is a short-term bridge loan to a high yield bond issue, one source said. Dow Jones Newswires reported last month that Grifols would seek to refinance part of the acquisition through the bond market. The remainder of the financing comprises $3.4 billion of senior debt, sources said. Grifols said in a statement in June that it had hired BNP Paribas, BBVA, Deutsche Bank, HSBC, Morgan Stanley and Nomura to arrange the financing. The senior debt is divided between a five-year $750 million tranche A amortising loan, priced at 375 basis points over Libor for dollar commitments or 400 basis points over Euribor for euros, a person familiar with the matter said. Tranche B amounts to a $2.35 billion, six-year loan with repayment at maturity. Pricing on tranche B is 400 basis points over Libor for dollar commitments and 425 basis points over Euribor for euros. In addition, there is a $300 million five-year revolving credit facility. Syndication of the senior debt is underway, the people said. Grifols said in June it had agreed to buy Talecris for $3.4 billion in a deal that would make it the world's third-largest plasma-products manufacturer behind Baxter International Inc.(BAX) and CSL Ltd. The total implied offer value for Talecris is $3.4 billion and the resulting transaction value, including net debt, is approximately $4 billion, the company said. Grifols agreed to pay $19 in cash and 0.641 in newly issued, non-voting shares for each share of Talecris, which is 49% owned by private equity firm, Cerberus Capital Management LP. At the time of the agreement, the offer was worth a total of $26 a share, a 53% premium over Talecris' average share price over the preceding 30 days. Standard & Poor's Corp. placed Talecris' BB senior unsecured debt ratings on creditwatch negative in June following the takeover announcement. Grifols is unrated. By Carol Dean, Dow Jones Newswires; 44 20 7842 9306 [email protected] (END) Dow Jones Newswires July 08, 2010 10:02 ET (14:02 GMT)