Herbalife Nutrition announced that it has closed a new $1.25 billion senior secured credit facility, which consists of a $250 million revolving credit facility maturing August 2023, a $250 million term loan A maturing August 2023 and a $750 million term loan B maturing August 2025. The Company also announced the closing of the previously announced offering by HLF Financing SaRL, LLC and Herbalife International, Inc. (the “Issuers”), each a wholly owned subsidiary of the Company, of $400 million aggregate principal amount of Senior Notes due 2026 (the “Notes”).
The Company used the net proceeds from the offering, together with borrowings under the Company’s new senior secured credit facilities, to refinance all amounts outstanding under its prior senior secured credit facilities and to pay related fees and expenses. Any remaining net proceeds will be used for general corporate purposes. The prior senior secured credit facility was due to mature in February 2022 with respect to the revolver and February 2023 with respect to the term loan.
“The refinancing provides a substantive improvement in interest rates and terms as compared to our prior credit facility, and it was significantly oversubscribed,” said Bosco Chiu, the Company’s chief financial officer. “We thank our banking partners for their confidence and commitment to Herbalife Nutrition.”
Loans under the revolving credit facility and term loan A facility bear interest at a per annum rate equal to LIBOR plus 3.00% while loans under the term loan B facility bear interest at a per annum rate equal to LIBOR plus 3.25%. Jefferies acted as administrative agent for the new term loan B facility and collateral agent for the credit facility, and Rabobank acted as administrative agent for the revolving credit facility and the term loan A facility. Jefferies and Rabobank acted as joint book runners and joint lead arrangers for the term loan B facility, and Rabobank acted as sole lead book runner and sole lead arranger for the term loan A facility and revolving credit facility.
The Notes have a fixed annual interest rate of 7.250%, which will be paid semi-annually on February 15 and August 15 of each year, commencing on February 15, 2019. The Notes are guaranteed by the Company, the parent company of the Issuers, and on a senior unsecured basis by each of the Company’s existing subsidiaries that guarantee the obligations of the U.S. domestic borrowers under the Company’s new senior secured credit facilities discussed above and any future subsidiaries of the Company that will similarly guarantee such obligations of such borrowers.