Endo Finance Holdings, a wholly-owned subsidiary of Endo, Inc., priced its seven-year, $1.5 billion senior secured term loan. Goldman Sachs Bank USA served as left lead arranger on the term loan.
Endo, Inc. was recently formed for the purpose of acquiring substantially all of Endo International’s assets and assuming certain liabilities pursuant to Endo International’s recently approved Chapter 11 plan of reorganization. Upon consummation of the plan, which is expected to occur on or around April 23, Endo, Inc. will become a diversified specialty pharmaceutical company. The $1.5 billion term loan is part of an exit financing package related to the plan of reorganization.
To optimize the exit financing transactions, Endo Finance Holdings increased the expected size of the term loan from $1.25 billion to $1.5 billion million and decreased the offering size of its 8.5% senior secured notes due 2031 from $1.25 billion million to $1 billion. The term loan will have an interest rate of, at Endo Finance Holdings’ option, term SOFR plus 4.5% per annum or a base rate plus 3.5% per annum, in each case, stepping down by 0.25% upon achievement of certain first lien net leverage levels. The term loan will be senior secured obligations of Endo Finance Holdings and will be guaranteed on a senior secured basis by Endo, Inc. and, upon emergence, certain of its subsidiaries. The full amount of the term loan is expected to be borrowed on April 23, subject to customary closing conditions.
With the proceeds of the Term Loan, Endo International and its affiliated debtors will have obtained a portion of the financing required under the fourth amended joint Chapter 11 plan of reorganization. Endo International currently expects the plan to be effective on or around April 23. Endo Inc.’s initial capital structure is expected to consist of a five-year, $400 million senior secured super-priority revolving credit facility (undrawn at emergence), the $1.5 billion million term loan and the $1 billion aggregate principal amount of the notes.
Endo, Inc. intends to use a portion of the net proceeds of the term loan, together with the proceeds from the notes offering, the proceeds of the rights offerings under the plan and cash on hand, to acquire substantially all of the assets of Endo International and certain of its affiliates. Endo International will use the sale proceeds to make settlement payments under the plan of reorganization, make cash distributions to first lien claimholders under the plan and pay certain professional fees. A portion of the proceeds will also be used by Endo, Inc. for general corporate purposes.
PJT Partners served as independent capital markets advisor to Endo, Inc. on its exit financing.
