DSI Renal first- and second-lien term loans head higher with U.S. Renal merger news

By Sara Rosenberg

New York, Aug. 25 – DSI Renal’s first- and second-lien term loans strengthened in the secondary market on Tuesday on the back of news that the company is combining with U.S. Renal Care Inc. as lenders are expecting that the debt will be taken out with the merger.

DSI Renal’s first-lien term loan was quoted at 99¾ bid, 100¼ offered, and its second-lien term loan was quoted at 100¾ bid, 101¼ offered, both up about half a point on the day, one trader remarked.

The trader explained that the first-lien term loan is anticipated to be repaid at par, and the second-lien term loan is expected to be repaid at 101.

Although news of the merger emerged on Monday, the announcement fell somewhat under the radar, resulting in a delayed reaction by DSI Renal’s debt in trading, the trader added.

Meanwhile, U.S. Renal’s first-lien term loan was unchanged during the session, with levels quoted at 99½ bid, par offered, a second trader said.

Closing on the merger is expected by the end of the fourth quarter, subject to regulatory and certificate of need approval in certain states.

Terms of the transaction were not disclosed.

DSI Renal’s current investors include Frazier Healthcare and New Enterprise Associates, and U.S. Renal’s equity sponsors include Leonard Green & Partners, Cressey & Co. and SV Life Sciences.

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