Roadshow becomes part of plan for Emdeon's $750 million LBO bonds

By Paul A. Harris

Portland, Ore., Oct. 4 - Having secured a couple of large commitments for Emdeon Inc.'s $750 million offering of high-yield bonds via club-style interactions with accounts, dealers now plan to market the remaining bonds on a conventional roadshow, according to an informed source.

Previously, with ongoing market volatility rendering an inhospitable backdrop for a roadshow, there were expectations that most if not all of the deal would be circled up private placement style.

Timing for the start of the roadshow for the senior notes, which will be offered in two tranches, remains to be determined.

However the Emdeon $1.2 billion term loan is set to launch at a Thursday bank meeting, according to a market source.

Discovering prices

Timing and pricing for Emdeon's bonds will undoubtedly be influenced by the outcome of the loan execution, according to a mutual fund manager who is active in both markets.

Presently new issues in both the junk bond market and the leveraged loan market are the subjects of price discovery, the buysider said.

Bridge loan interest rate caps, which were set when the original debt financing commitments were made, have almost certainly been overtaken by recent events in the volatile leverage markets, the mutual fund manager said.

Concessions to present market conditions could easily result in rates which surpass the bridge caps, whereupon the dealers will have to decide whether or not they are willing to make up the differences in order to move the debt off their balance sheets, the buysider added.

According to a source close to the deal, the Emdeon bridge loan backing the bonds has been partially syndicated, and the dealers have elected to hold the remainder.

Barclays Capital Inc., Bank of America Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co. and SunTrust Robinson Robinson Humphrey are the joint bookrunners for Emdeon's Rule 144A bonds.

Proceeds will be used to help fund the buyout of the company by Blackstone Capital Partners VI LP for $19.00 per share in cash in a transaction is valued at about $3 billion.

Emdeon is a Nashville-based provider of revenue and payment cycle management services, connecting payers, providers and patients in the U.S. health care system.

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