Gentiva Health reworks term loan sizes, flexes pricing higher

By Sara Rosenberg

New York, Oct. 10 - Gentiva Health Services Inc. upsized its six-year term loan B to $670 million from $655 million and downsized its five-year term loan C to $155 million from $200 million, according to a market source.

Also, pricing on the term loan B was raised to Libor plus 525 basis points from talk of Libor plus 450 bps to 475 bps and pricing on the term loan C was lifted to Libor plus 450 bps from talk in the Libor plus 400 bps area, the source said.

In addition, both term loans saw an increase in the Libor floor to 1.25% from 1% and the 101 soft call protection extended to one year from six months, the source continued.

Unchanged were original issue discounts of 99 on the term loan B and 99½ on the term loan C.

Amortization on the term loan B is 1% per annum and on the term loan C is 7.5% in year one, 12.5% in year two, 15% in year three, 20% in year four and 10% in the first three quarters of year five with the remainder due at maturity.

Financial covenants include a maximum total leverage ratio.

The company's now $925 million senior secured credit facility (B2/B), down from $955 million, also provides for a $100 million revolver.

Barclays, Bank of America Merrill Lynch, GE Capital Markets, Morgan Stanley Senior Funding Inc. and SunTrust Robinson Humphrey Inc. are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of Harden Healthcare Holdings Inc. and to refinance existing debt.

Under the agreement, Harden is being bought for about $408.8 million, consisting of $355 million in cash and around $53.8 million in Gentiva common stock.

Other funds for the transaction will come from cash on hand, and, as a result of the reduction in the total term loan borrowings, $30 million of additional cash will be used for the acquisition, the source added.

Closing is expected in mid-October, subject to customary conditions.

Gentiva is an Atlanta-based provider of home health and hospice services. Harden is an Austin, Texas-based provider of home health, hospice and community care services.

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