FHC increases first- and second-lien pricing and discounts

By Sara Rosenberg

New York, Nov. 27 - FHC Health Systems Inc. raised pricing on its first- and second-lien term loans and widened the original issue discounts on the tranches, according to a market source.

The $175 million six-year first-lien term (B1/B+) is now priced at Libor plus 500 basis points, up from most recent guidance of Libor plus 400 bps to 450 bps and original talk at launch of Libor plus 350 bps.

The $85 million 61/2-year second-lien term loan (B3/CCC+) is now priced at Libor plus 850 bps, up from original talk at launch of Libor plus 750 bps, the source continued.

And, the original issue discounts on the first- and second-lien term loans were changed to 98 from 99.

The deal is heard to be pretty much done at the new pricing and discount levels, the source added.

FHC's $290 million credit facility also includes a $20 million five-year asset-based revolver that is being held by Merrill Lynch and a $10 million five-year cash flow revolver (B+).

Covenants include total leverage, interest coverage and capital expenditures.

Goldman Sachs is the lead bank on the deal.

Proceeds will be used to help back the buyout of the company by Crestview Partners.

Leverage through the first-lien debt is 2.3 times and leverage through the second-lien debt is 3.4 times.

FHC Health Systems is a Norfolk, Va., provider of behavioral health care services.

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