Aspen Dental withdraws $370 million credit facility from market

By Sara Rosenberg

New York, Feb. 27 - Aspen Dental Management Inc. pulled its $370 million credit facility (B2/B) from the primary market, according to a market source.

The facility consisted of a $40 million five-year revolver and a $330 million six-year covenant-light term loan B, both talked at Libor plus 475 basis points.

Included in the revolver was a 50 bps undrawn fee, a 100 bps upfront fee and a springing leverage covenant when drawn or more than $15 million of letters-of-credit are outstanding.

The term loan had a 1% Libor floor, an original issue discount of 991/2, 101 soft call protection for six months and amortization of 1% per annum.

GE Capital Markets, Jefferies Finance LLC and UBS Securities LLC were the lead banks on the deal.

Proceeds were going to be used to refinance existing debt.

Essentially, the company was doing an opportunistic transaction that originally contemplated both a 125 bps price reduction and the refinancing of the term loan on a covenant-light basis.

The source explained that while the proposed transaction had support from a large number of loan investors, others were concerned about the covenant-light structure given that the company's performance in 2012 had been weaker than expected.

As a result, a maintenance covenant was added to the term loan earlier this week, and it was possible that pricing was going to have to widen from initial talk.

The company decided to pull the deal because it believes it may be able to obtain more attractive terms that better reflect the improvement in its financial performance once the strong momentum and operating environment have been sustained over a longer period, the source added.

Aspen Dental is an East Syracuse, N.Y.-based provider of denture and dental care services.

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