Sheridan tweaks deal; Community Health, Concentra set talk; Lear firms OID; Hub fills up

By Sara Rosenberg

New York, June 4 - Sheridan Healthcare Inc. came out with some changes to its credit facility that included shifting some funds between term loans, firming up pricing on everything at the high end of talk and adding a step down to the first-lien term loan B.

In more primary news, Community Health Systems Inc. price talk started circulating as the deal gears up for its Thursday bank meeting and Concentra Inc. released price talk on its credit facility as it gets ready for its Wednesday bank meeting.

Also, Lear Corp. set the original issue discount on its term loan B and Hub International Ltd.'s credit facility was heard to be fully subscribed on Monday.

Sheridan Healthcare announced a round of modifications to its credit facility, including moving $20 million out of the second-lien term loan and into the first-lien term loan B, finalizing pricing and adding a leverage-based step down to the first-lien term loan B, according to a market source.

With the revisions, the seven-year first-lien term loan B (B1/B) is now sized at $395 million, up from $375 million, pricing firmed up at Libor plus 250 basis points, the wide end of original talk of Libor plus 225 bps to 250 bps, and a step down to Libor plus 225 bps was added, effective when leverage is less than 5.75 times, the source said.

On the flip side, the eight-year PIK toggle for life second-lien term loan (Caa1/CCC+) is now sized at $150 million, down from $170 million, and pricing firmed up at Libor plus 575 bps cash pay, the high end of talk of Libor plus 550 bps to 575 bps cash pay.

If the company opts for PIK pricing on the second-lien loan, then the spread will increase by 75 bps.

The second-lien loan carries call protection of 102 in year one and 101 in year two.

As for the $75 million six-year revolver (B1/B), pricing on the tranche also firmed up at Libor plus 250 bps, the wide end of original talk of Libor plus 225 bps to 250 bps, the source added.

All tranches under the facility are covenant-light.

Recommitments were due from lenders on Monday at 5 p.m. ET.

Lehman, UBS, Credit Suisse and Citigroup are the bookrunners on the $620 million deal, with Lehman and UBS the joint lead arrangers.

Proceeds will be used to help fund Hellman & Friedman's acquisition of the company from J.W. Childs Associates LP.

Sheridan is a Sunrise, Fla., physician practice management company.

Community Health guidance

Community Health Systems price talk began making its way around the market as Ba3/BB- ratings have now been announced on the $6.95 billion senior secured credit facility, which is scheduled to launch with a bank meeting on Thursday, according to a market source.

The $5.7 billion seven-year term loan, the $500 million seven-year delayed-draw term loan and the $750 million six-year revolver are all being talked at Libor plus 225 bps, the source said.

Credit Suisse and Wachovia are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of Triad Hospitals Inc. for $54.00 per share in cash, or $6.8 billion, including $1.7 billion of existing debt.

The funded term loan will be used to help finance the acquisition and to refinance existing debt, and the delayed-draw term loan and revolver will be used for working capital and general corporate purposes.

Other acquisition financing will come from $3.365 billion of senior unsecured notes.

Total debt to last-12-month adjusted EBITDA is expected to be 6.3 times.

The acquisition is expected to close early in the third quarter, subject to certain closing conditions, including approval by Triad's stockholders. There is no financing condition.

In connection with the acquisition, Community Health commenced a cash tender offer for any and all of its $300 million 6½% senior subordinated notes due 2012 and Triad began a cash tender offer for any and all of its $600 million 7% senior notes due 2012 and $600 million 7% senior subordinated notes due 2013.

The tender offers will expire on June 27.

Community Health is a Nashville, Tenn., operator of general acute care hospitals in non-urban communities. Triad is a Plano, Texas, owner and manager of hospitals and ambulatory surgery centers.

Concentra price talk

Also coming out with price talk was Concentra, as it's getting ready to launch its $560 million credit facility into syndication with a bank meeting on Wednesday afternoon, according to a market source.

The $75 million six-year revolver is being talked at Libor plus 225 bps, the $330 million seven-year first-lien term loan B is being talked at Libor plus 250 bps and the $155 million eight-year second-lien PIK toggle term loan is being talked at Libor plus 550 bps, the source said.

The second-lien term loan will step up by 75 bps if PIK is elected, the source remarked.

Call protection on the second-lien loan is non-callable for one year, then at 102 in year two and 101 in year three.

The first- and second-lien term loans and the revolver are covenant-light; however, the revolver has a total leverage covenant when it's drawn or letters of credit are issued.

Citigroup, UBS, Bank of America and JPMorgan are the lead banks on the deal, with Citi the left lead.

The deal is linked to Viant Holdings Inc.'s spinoff from Concentra.

Under the transaction, Concentra will contribute its Network Services business to Viant in exchange for additional shares of Viant common stock, $185 million of Viant notes and about $260 million in cash.

Concentra would retire its current senior secured debt using the cash proceeds received from Viant and a portion of the cash proceeds borrowed under its new facility and pay a cash dividend to its stockholders of about $350 million.

Viant will also be getting a new credit facility via Citigroup, UBS, Bank of America and JPMorgan in connection with this spinoff.

Viant's $325 million credit facility (B), which is scheduled to launch with a bank meeting on Wednesday morning, consists of a $275 million seven-year term loan B talked at Libor plus 250 bps and a $50 million six-year revolver talked at Libor plus 225 bps.

Like Concentra, both the term loan and the revolver are covenant-light, with the revolver having a total leverage covenant when it's drawn or letters of credit are issued.

Concentra is a Dallas-based provider of occupational health care services and specialized cost management services. Viant is a Naperville, Ill., health care payment and cost management services company.

Lear sets OID

In other primary happenings, Lear firmed up the original issue discount on its $2.6 billion seven-year term loan B at 991/2, according to a market source. It was being contemplated in the range of 99½ to 993/4.

The term loan B is priced at Libor plus 275 bps. Last week, pricing on the tranche was flexed up from original talk of Libor plus 225 bps to 250 bps.

Lear's $3.6 billion senior secured deal (B2/B) also includes a $1 billion five-year revolver, with a 50 bps commitment fee.

Bank of America is the lead arranger and bookrunner on the deal that will be used to help fund American Real Estate Partners, LP's acquisition of Lear for $5.3 billion, including the assumption of debt. Lear shareholders will receive $36.00 per share in cash.

Lear is a Southfield, Mich.-based supplier of automotive seating, electronics and electrical distribution systems. American Real Estate Partners is a New York-based diversified holding company engaged in a variety of businesses and an affiliate of Carl C. Icahn.

Hub subscribed

Hub International's in-market credit facility reached full subscription levels by Monday afternoon, according to a buyside source.

The deal, which launched with a bank meeting on May 21, is comprised of a $100 million six-year multi-currency revolver, a $535 million seven-year term loan and a $140 million seven-year final maturity delayed-draw term loan, with all three tranches talked at Libor plus 275 bps.

The delayed-draw term loan has an unused fee of 137.5 bps that steps up by 25 bps every six months.

Morgan Stanley and Merrill Lynch are joint bookrunners and joint lead arrangers on the $775 million senior secured credit facility (B2/B), with Morgan Stanley the administrative agent and Merrill Lynch the syndication agent.

Proceeds will be used to help fund the buyout of Hub by Apax Partners and Morgan Stanley Principal Investments for $41.50 per share in cash and to refinance certain existing debt, including $75 million of 6.43% senior notes due April 4, 2016, $7.5 million of 5.71% senior notes due April 4, 2011 and $55 million of 6.16% senior notes due June 15, 2013.

The delayed-draw term loan will be available to, among other things, finance permitted acquisitions and for general corporate purposes.

Hub is a Chicago-based insurance broker.

Universal Hospital closes

Universal Hospital Services Inc. closed on its new $135 million ABL revolver (BB), according to a news release.

Merrill Lynch and Bear Stearns acted as the lead banks on the deal.

The revolver was obtained in connection with the company's buyout by Bear Stearns Merchant Banking for total consideration of about $712 million from J. W. Childs Associates, the Halifax Group and management.

Universal Hospital is an Edina, Minn., medical equipment lifecycle services company.

Rite Aid closes

Rite Aid Corp. completed its acquisition of Jean Coutu Group USA Inc. from Longueuil, Quebec-based Jean Coutu Group Inc., according to a news release.

To help fund the transaction, Rite Aid got a new $1.105 billion seven-year senior secured term loan (Ba3/BB-) that is priced at Libor plus 175 bps.

Citigroup acted as the lead bank on the deal.

Rite Aid is a Camp Hill, Pa., national drugstore chain.

Neff closes

Neff Corp. closed on its $640 million credit facility consisting of a $350 million six-year ABL revolver priced at Libor plus 150 bps and a $290 million 71/2-year covenant-light second-lien term loan (B3/B-) priced at Libor plus 350 bps, with call protection of 102 in year one and 101 in year two.

During syndication, the second-lien term loan was upsized from $270 million and pricing was reduced from original talk at launch of Libor plus 450 bps.

The upsizing of the second-lien term loan is a result of the company's decision to downsize its bond offering to $230 million from $250 million.

Bank of America, CIBC, General Electric Capital Corp. and UBS acted as the lead banks on the deal, with Bank of America the left lead.

Proceeds were used to help fund Lightyear Capital LLC's acquisition of the company from Odyssey Investment Partners. Completion of this transaction was announced on Monday.

Neff is a Miami-based construction equipment rental company.

Caritor closes

Caritor Inc. completed its acquisition of Keane Inc. for about $854 million in cash, according to a news release.

To help fund the transaction, Caritor got a new $690 million senior secured credit facility (B1/BB-) consisting of a $50 million revolver priced at Libor plus 200 bps, a $600 million term loan priced at Libor plus 225 bps and a $40 million synthetic letter-of-credit facility priced at Libor plus 225 bps.

During syndication, pricing on the term loan and synthetic letter-of-credit facility was increased from original talk at launch of Libor plus 200 bps and a leverage covenant of 4.25 times was added to the tranches that previously carried no financial covenants.

Citigroup, UBS and Bank of America acted as the lead banks on the deal, with Citi the left lead.

Caritor is a San Ramon, Calif., provider of IT services. Keane is a business process and IT services firm.

The combined company will operate under the Keane name and maintain Keane's headquarters in Boston.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.