By Paul A. Harris
Portland, Ore., Dec. 5 – Select Medical Corp. priced an upsized $675 million add-on to its 6¼% senior notes due Aug. 15, 2026 (B3/B-) at 106 to yield 5.178% in a quick-to-market Thursday trade, according to market sources.
The issue size increased from $625 million.
The issue price came at the rich end of the 105.5 to 106 price talk. Initial talk was in the 105 to 105.5 area.
The deal was heard to be two-times oversubscribed around 1 p.m. ET on Thursday, a trader said.
J.P. Morgan Securities LLC, BofA Securities Inc., Deutsche Bank Securities Inc., RBC Capital Markets LLC, Goldman Sachs & Co. LLC, PNC Capital Markets and Fifth Third Securities Inc. were the joint bookrunners.
The Mechanicsburg, Pa.-based health care company plans to use a portion of the net proceeds, together with a portion of the proceeds from a proposed incremental term loan, and, if needed, available cash, to make an intercompany loan to Concentra, Inc., a joint venture subsidiary of Select Medical, which will use the proceeds to pay off all of Concentra's outstanding term loans
| Issuer: | Select Medical Corp.
|
| Amount: | $675 million, increased from $625 million
|
| Maturity: | Aug. 15, 2026
|
| Security description: | Add-on to 6¼% senior notes due Aug. 15, 2026
|
| Bookrunners: | J.P. Morgan Securities LLC, BofA Securities Inc., Deutsche Bank Securities Inc., RBC Capital Markets LLC, Goldman Sachs & Co. LLC, PNC Capital Markets LLC and Fifth Third Securities Inc.
|
| Coupon: | 6¼%
|
| Price: | 106
|
| Yield: | 5.178%
|
| Spread: | 346 bps
|
| First call date: | Aug. 15, 2022
|
| Trade date: | Dec. 5
|
| Settlement date: | Dec. 10
|
| Ratings: | Moody's: B3
|
| S&P: B-
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 105.5 to 106
|
| Marketing: | Quick to market
|
| Original issue: | $550 million priced in July 2019
|
| Fungibility: | Add-on notes are expected to become fungible with original notes
|
| Total issue size: | $1,225,000,000
|
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