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LCD: GNC Holdings issues new loans to refinance

Supplement and vitamin retailer GNC Holdings Inc. is taking another run at the U.S. leveraged loan market and will be paying up in the process.

GNC on Nov. 27 relaunched a transaction that includes a $300 million term loan due Jan. 31, 2020, and a $905 million term loan due Jan. 31, 2021, sources say. The new debt will refinance the company’s existing term loan B and revolver.

Price talk on the smaller term loan is 850–900 basis points over the London Interbank Offered Rate, while price talk on the larger loan is 950–1,000 basis points over LIBOR. When taking into account that the loans are being offered to investors at 96 cents on the dollar, the yield to maturity on the credits works out to roughly 13.36% and 13.61%, respectively.

GNC now has a corporate credit rating of B, according to S&P Global. As of last week, the average yield-to-maturity of a single-B new-issue leveraged loan was 5.27%, according to LCD, an offering of S&P Global Market Intelligence.

GNC earlier this month launched to the U.S. loan investor market a $705 million, five-year term loan that was talked at LIBOR plus 700 bps. That credit was not completed. In May, GNC Holdings discontinued a planned amend-to-extend loan.

In December 2013, GNC completed a $1.35 billion, five-year term loan that was priced at 250 bps over LIBOR. At the time the company had a corporate credit rating of BB+.

GNC shares have been buffeted of late, declining some 50% year-to-date and by roughly 17% since the company's last earnings report a month ago, according to Nasdaq.com.

Pittsburgh-based GNC is a global specialty health, wellness and performance retailer.