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Gentiva cuts term loan B to $550 million, finalizes discount at 96
By Sara Rosenberg
New York, Aug. 12 - Gentiva Health Services Inc. downsized its six-year term loan B to $550 million from $600 million and firmed the original issue discount at 96, the wide end of the most recent 96 to 97 talk, according to a market source.
Pricing on the term loan B was left at Libor plus 500 basis points with a 1.75% Libor floor.
There is soft call protection of 102 in year one and 101 in year two under the B loan.
Gentiva's now $875 million, down from $925 million, senior credit facility (Ba2/BB-) also includes a $125 million five-year revolver and a $200 million five-year term loan A.
Pricing on the term loan A is Libor plus 500 bps with a 1.75% Libor floor and an original issue discount of 98, after being increased from Libor plus 400 bps with a 1.5% Libor floor and an original issue discount of 981/2, the source said.
Bank of America, GE Capital, Barclays Bank and SunTrust are the joint lead arrangers and bookrunners on the deal, with Bank of America the administrative agent.
Covenants under the credit facility include a minimum interest coverage ratio and a maximum total leverage ratio.
Proceeds will be used to help fund the acquisition of Odyssey HealthCare Inc. for $27 per share, for an aggregate purchase price of about $1 billion, and to refinance existing debt.
Other funding for the transaction will come from $325 million of senior unsecured notes, which was upsized from $305 million in connection with the term loan B downsizing.
The remaining funds that were lost from the B loan reduction will be made up through revolver borrowings, the source added.
Following completion of the transaction, which is expected on or around Aug. 17, net leverage will be around the 4.0 times area.
Gentiva is an Atlanta-based home health care provider. Odyssey is a Dallas-based provider of hospice care.
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