Kyphon up to $675 million credit facility to launch Tuesday

By Sara Rosenberg

New York, Dec. 8 - Kyphon Inc. is scheduled to hold a bank meeting on Tuesday to launch its proposed up to $675 million credit facility, according to a market source.

Bank of America is the lead bank on the deal.

The facility consists of a $200 million to $300 million five-year revolver and a $375 million seven-year term loan B, according to a recent 8-K filed with the Securities and Exchange Commission.

Financial covenants will include maintenance on a rolling four-quarter basis of a maximum leverage ratio of less than 4.50 to 1.00 with stepdowns to be determined and an interest coverage ratio to be determined.

Proceeds will be used to help fund the acquisition of St. Francis Medical Technologies, Inc. for $725 million.

Kyphon is a Sunnyvale, Calif., developer and marketer of medical devices designed to restore spinal function and diagnose low back pain. St. Francis is an Alameda, Calif., medical device company focused on technologies and procedures for orthopedic and neurological spine surgery.

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