DSI Renal prices and allocates $520 million of term loans

By Paul A. Harris

Portland, Ore., April 22 - DSI Renal Inc.'s $520 million of covenant-light term loans priced and allocated on Monday, according to a market source.

A $360 million first-lien term loan priced at 99.5 with an interest rate of Libor plus 375 basis points. The deal was seen at 99¾ bid, 100¼ offered on Tuesday after trading as high as par bid on Monday, according to a trader.

The spread came 25 bps wide of the wide end of the original 325 bps to 350 bps spread talk.

The first-lien loan, which has a 1% Libor floor, features a coupon step-down to 350 bps when first-lien net leverage is less than 3.5 times. It has 101 soft call protection for six months.

The company also syndicated a $160 million Libor plus 675 bps covenant-light second-lien term loan at 99.25.

The spread came at the tight end of the 675 bps to 700 bps spread talk. The discount was trimmed from 99.00.

The second-lien loan features a 1% floor and has call protection of 102 in year one and 101 in year two.

The company's $560 million credit facility also provides for a $40 million five-year revolver.

RBC Capital Markets, Barclays and GE Capital Markets are the leads on the deal.

Proceeds will be used to refinance existing debt.

DSI Renal is a Nashville-based provider of dialysis services.

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