Vanguard closes on $545 million credit facility

New York, May 19 - Vanguard Health Systems, Inc. said it closed on a new $545 million credit facility (Ba3/B+).

The new facility consists of a $245 million five-year revolving credit facility and a $300 million seven-year term loan.

Proceeds were used to repay $183.1 million outstanding under the company's old credit facility and to provide funds for working capital, capital expenditures and general corporate purposes.

The Nashville, Tenn. acute care hospital operator said the new credit facility has better interest rates, increased capital expenditure capacity and more flexible covenants than the old one.

Interest on term loans is at Libor plus 200 or 225 basis points. Currently the rate is 200 basis points less than the old facility.

The revolver is at Libor plus a margin from 175 to 275 basis points. Vanguard said that rate is a reduction of 50 basis points compared to the old loan.

The interest rates vary depending on Vanguard's leverage ratio.

Banc of America Securities LLC and Citigroup Global Markets Inc. were joint lead arrangers and bookrunners.

The deal was originally launched at $550 million in size with a $250 million revolver.

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