Galderma launches $2.53B term loan B repricing, $400M add-on

Galderma S.A. is approaching the market with a proposed repricing of its $2.53 billion dollar-denominated term loan B due October 2026 along with a $400 million fungible add-on that will be used to refinance a portion of the euro-denominated tranche, according to sources. A lender call is scheduled for today at 1 p.m. ET and commitments are due by 5 p.m. ET on Wednesday, March 17.

Price talk is L+400, with a 0.75% Libor floor and an issue price of 99.75 for the add-on and par for the repriced loan. There will be a 25-basis-points margin step-down at 4.35x net first-lien leverage. Lenders are offered six months of 101 soft call protection.

At talk, the yield to maturity is 4.89% for the add-on and 4.84% for the existing repriced TLB.

Credit Suisse is leading the deal and Deutsche Bank and Goldman Sachs are joint lead arrangers.

This transaction will lower the spread on the covenant-lite TLB from L+425 currently and the floor from 1%. For reference, pricing on the euro TLB is E+375, with a 0% floor.

The loans were originally placed in July 2019 to finance EQT and ADIA's acquisition of Nestle's skin health division, now known as Galderma. At issuance, the dollar tranche was $2.55 billion, and the euro tranche totaled €971 million. Financing also included a CHF1.35 billion pre-placed second-lien loan split between CHF945 million and CHF405 million tranches denominated in dollars and euros, respectively.

Investors are being guided by arrangers toward first-lien ratings of B-/B2/B and corporate ratings are B-/B3/B.

Switzerland-based Galderma is a skincare company focused on aesthetic, consumer health and prescription products.