Magellan Health bank lenders accelerate debt, block coupon payment

New York, Feb. 11 - Magellan Health Services, Inc. disclosed that its bank lenders have accelerated borrowings under its credit agreement and blocked payment of the coupon on its 9% senior subordinated notes maturing 2008 which is due on Feb. 17.

The Atlanta company revealed the acceleration in a filing with the Securities and Exchange Commission which included a letter from JP Morgan Chase Bank, administrative agent and collateral agent for the credit facility.

Magellan noted that it continues to be in discussions with its bank lenders and noteholders on reducing its debt.

In the letter, JP Morgan Chase said it was accelerating borrowings under the facility, which it added had not been paid when due. In addition the default under the facility has not been cured or waived.

JPMorgan added that it reserves rights and remedies with respect to the acceleration and non-payment.

Wachovia Bank, NA is syndication agent for the credit facility and Credit Lyonnais is documentation agent.

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