MedAssets cuts pricing on $785 million facility to Libor plus 375 bps

By Sara Rosenberg

New York, Nov. 9 - MedAssets Inc. reduced pricing on its $785 million credit facility (Ba3/BB-) to Libor plus 375 basis points from talk of Libor plus 400 bps to 425 bps, while leaving the 1.5% Libor floor unchanged, according to a market source.

The facility consists of a $635 million six-year term loan B, which was upsized on Monday from $600 million when the company's bond offering was reduced to $325 million from $360 million, and a $150 million five-year revolver.

Pricing on the B loan and the revolver can step down to Libor plus 350 bps when total leverage is less than 4.5 times, the source said. This step-down is new to the B loan, but the revolver always provided for a 25 bps step based on leverage.

As before, the term loan B is being offered at an original issue discount of 99 and has 101 soft call protection for one year.

Recommitments were due from lenders at 5 p.m. ET on Tuesday and allocations are expected to go out this week.

Barclays and JPMorgan are the joint lead arrangers on the deal, with Barclays the left lead and administrative agent.

Financial covenants include a maximum total leverage ratio and a minimum ratio of consolidated EBITDA to cash consolidated interest expense.

Proceeds from the credit facility and the notes will be used to fund the acquisition of the Broadlane Group and to refinance existing bank debt.

Under the acquisition agreement, MedAssets is buying Broadlane, a Dallas-based end-to-end cost-management partner for health care providers, for roughly $850 million in cash, with $725 million to be paid at closing and $125 million to be paid in January 2012.

Senior leverage is 3.3 times, up from 3.2 times under the original structure, and total leverage remains at 5.1 times.

MedAssets is an Alpharetta, Ga.-based provider of technology enabled products and services for hospitals, health systems and ancillary health care providers.

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