Air Medical firms $1.46 billion term loan at Libor plus 425 bps

By Sara Rosenberg

New York, Sept. 26 – Air Medical Group Holdings Inc. set pricing on its $1,455,000,000 seven-year incremental senior secured covenant-light term loan B (B1/B) at Libor plus 425 basis points, the low end of the Libor plus 425 bps to 450 bps talk, according to a market source.

Also, the original issue discount on the term loan was changed to 99.25 from 99, the source said.

The term loan still has a 1% Libor floor, 101 soft call protection for six months and a ticking fee of half the spread from days 31 to 60 and the full spread thereafter.

Morgan Stanley Senior Funding Inc., Jefferies LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs Bank USA, Credit Suisse Securities (USA) LLC and Nomura Securities International are the joint lead arrangers on the deal.

Recommitments were scheduled to be due at 2:30 p.m. ET on Tuesday, the source added.

Proceeds will be used to help fund the acquisition of American Medical Response from Envision Healthcare Corp. in a transaction valued at $2.4 billion.

Other funds for the acquisition will come from an unsecured debt commitment from PSP Investments Credit USA LLC and Ares Capital Management LLC, and equity.

Closing is expected in the fourth quarter, subject to regulatory approval and customary closing conditions.

Air Medical Group, a KKR portfolio company, is a Dallas-based provider of air and ground ambulance programs. American Medical Response is a Greenwood Village, Colo.-based medical transportation company.

Upon completion of the transaction, the combined company will adopt a new name.

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