Evertec frees up for trading above OID; HealthSpring acquisition financing deal emerges

By Sara Rosenberg

New York, Aug. 27 - Evertec's credit facility allocated and broke for trading during Friday's session, with the term loan quoted in light trading above the original issue discount price at which it was sold during syndication.

Over in the primary market, HealthSpring Inc. announced plans to get new term loan borrowings as well as an amendment to its existing credit facility in connection with its acquisition of Bravo Health Inc.

Evertec starts trading

Evertec's credit facility hit the secondary market, with the $350 million term loan quoted at 97¾ bid, 98¾ offered on the open and then tightening up to 97¾ bid, 98½ offered, according to a trader.

Pricing on the term loan is Libor plus 525 basis points with a 1.7% Libor floor, and it was sold at an original issue discount of 97. There is 101 soft call protection for one year.

During syndication, pricing on the term loan was flexed up from Libor plus 475 bps, the Libor floor widened from 1.5%, the discount increased from 98 and the call protection was added.

The company's $400 million senior secured credit facility (Ba3/BB-) also includes a $50 million revolver.

Bank of America and Morgan Stanley are the lead banks on the deal.

Evertec being acquired

Proceeds from Evertec's credit facility will be used to help fund Apollo Management LP's acquisition of 51% of the company from Popular Inc.

Remaining funding for the acquisition will come from $225 million of notes, which is backed by a commitment for a senior unsecured bridge loan, and $165.75 million of equity.

Closing is expected in the third quarter.

The joint venture is valued at roughly $900 million. As part of the transaction, Popular, a San Juan, P.R., bank, transferred its merchant acquiring and processing and technology businesses to Evertec.

Evertec processes 1.1 billion transactions annually in the Caribbean and Latin America.

HealthSpring term loans

Moving to the primary, HealthSpring revealed on Friday that it will be getting $400 million in new term loans to help fund its purchase of Bravo Health for $545 million.

JPMorgan, Bank of America and Raymond James Bank are the lead banks on the deal.

Other funds for the acquisition will come from a $100 million draw under the company's existing undrawn $175 million revolver and unrestricted cash.

The existing facility, which includes a $175 million term loan A in addition to the revolver, will be amended as part of the transaction process.

Current pricing on the existing facility is Libor plus 325 bps. In a conference call, officials declined to comment on interest rates on its debt following this acquisition, but did say they expect an uptick of at least 50 bps.

HealthSpring expects to delever

HealthSpring also said in its conference call on Friday that it will focus on deleveraging its balance sheet, with plans to be at pre-deal levels by 2013 by using cash on hand to repay the bank debt.

At close, leverage on a pro forma EBITDA basis is anticipated to be 1.6 times and debt to capital is expected in the mid-to-high 30s.

Closing on the acquisition is expected by year-end, subject to customary conditions, including federal and state regulatory approvals.

HealthSpring is a Nashville, Tenn.-based Medicare Advantage coordinated care plans. Bravo Health is a Baltimore-based operator of Medicare Advantage coordinated care plans.

Mueller wraps revolver

In other news, Mueller Water Products Inc. closed on its $275 million asset-based revolving credit facility, according to an 8-K filed with the Securities and Exchange Commission on Friday.

Initial pricing on the revolver is Libor plus 300 bps with a 50 bps commitment fee. The spread can range from Libor plus 275 bps to 325 bps based on average availability.

Bank of America and JPMorgan acted as the joint lead arrangers and bookrunners on the deal.

Proceeds from the revolver, which was completed on Thursday, were used to help refinance the company's existing credit facility.

Mueller Water Products is an Atlanta-based manufacturer and marketer of products and services that are used in the transmission and distribution of drinking water and in water treatment facilities.

Airvana closes

Airvana Inc. completed its $360 million four-year term loan that is priced at Libor plus 900 bps with a 2% Libor floor and was sold at an original issue discount of 98, according to a market source.

During syndication, the loan was upsized from $330 million and pricing was increased from official talk at launch of Libor plus 800 bps to 850 bps.

Jefferies, Societe Generale and Macquarie acted as the lead banks on the deal, with Jefferies the left lead.

Proceeds were used to refinance existing debt and to pay a dividend. This dividend was increased as a result of the term loan upsizing.

Airvana is a Chelmsford, Mass.-based provider of mobile broadband network infrastructure products.

Chemtura completes deal

Chemtura Corp. closed on its $295 million six-year term loan B (Ba1), according to a news release. It's priced at Libor plus 400 bps with a 1.5% Libor floor and was sold at an original issue discount of 99.

During syndication, the discount on the term loan firmed at the low end of the initial 98 to 99 talk, and the size was reduced from $300 million as the company's bonds were upsized by $5 million to $455 million.

Proceeds from the term loan, notes and a $275 million five-year senior secured asset-based revolver will be used for exit financing.

Pricing on the revolver is initially set at Libor plus 275 bps. The revolver spread can range from Libor plus 275 bps to 325 bps based on availability.

Bank of America, Barclays and Citigroup acted as the lead banks on the term loan, and Bank of America acted as the lead on the revolver.

Chemtura is a Middlebury, Conn.-based manufacturer and seller of specialty chemicals and polymer products.

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