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DaVita cuts spread on $2.5 billion term loan B to Libor plus 225 bps
By Sara Rosenberg
New York, Aug. 1 – DaVita Inc. reduced pricing on its $2.5 billion seven-year term loan B to Libor plus 225 basis points from Libor plus 250 bps, according to a market source.
Also, the original issue discount on the term loan B was set at 99.5, the tight end of the 99 to 99.5 talk, the source said.
The term loan B still has a 0% Libor floor and 101 soft call protection for six months.
Covenants include a maximum net leverage ratio of 5x, stepping down to 4.5x after Dec. 31, 2022.
Security is a first priority interest in substantially all tangible and intangible assets, subject to some exceptions, owned by the borrower or any guarantor, including stock of domestic subsidiaries and 65% of any existing or future foreign subsidiaries.
Commitments for the term loan B remain due at 3 p.m. ET on Wednesday, the source added.
The company’s $5.25 billion of senior secured credit facilities (Ba1/BBB-) also include a $1 billion five-year revolver and a $1.75 billion five-year term loan A.
Based on an SC TO-I filed with the Securities and Exchange Commission, initial pricing on the revolver and term loan A is expected to be Libor plus 150 bps.
The term loan A will have a delayed-draw feature.
Wells Fargo Securities LLC, Credit Agricole, J.P. Morgan Securities LLC, MUFG, BofA Securities, Inc., Barclays, Credit Suisse Securities (USA) LLC, Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc. and SunTrust Robinson Humphrey Inc. are the lead arrangers on the deal. Bank of Nova Scotia and SMBC are co-managers.
Proceeds will be used to repay revolver borrowings and term loan debt, to redeem the $1.25 billion 5¾% senior notes due 2022, to buy back common stock, to pay fees and expenses and for general corporate purposes.
DaVita is a Denver-based provider of kidney dialysis services to patients with chronic kidney failure.
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