Ernest Health to launch $204 million credit facility on Thursday

By Sara Rosenberg

New York, March 29 - Ernest Health Inc. is scheduled to hold a bank meeting on Thursday to launch a proposed $204 million credit facility, according to a market source.

CIT Group is leading the deal.

The facility consists of a $30 million five-year revolver, a $120 million five-year first-lien term loan and a $54 million six-year second-lien term loan, the source said.

Price talk on the revolver and first-lien term loan is Libor plus 475 basis points with a 1.5% Libor floor, and price talk on the second-lien loan is Libor plus 800 bps with a 1.75% Libor floor.

Original issue discount talk is expected to be announced at the bank meeting, the source added.

Proceeds will be used to refinance existing debt.

Leverage through the first lien is 3.5 times and through the second lien is 5 times.

Ernest Health is an Albuquerque, N.M.-based developer and operator of inpatient rehabilitation and related post-acute health care services.

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