Sun Healthcare, Sabra expect $385 million loans, $225 million notes

By Sara Rosenberg

New York, Sept. 27 - Sun Healthcare Group Inc. expects to get a $285 million credit facility and Sabra Health Care REIT Inc. expects to get a $100 million secured revolver and $225 million of notes prior to the completion of the separation of the two companies, according to an S-4/A recently filed with the Securities and Exchange Commission.

Sun Healthcare's credit facility is anticipated to consist of $150 million in term loans, a $75 million funded letter-of-credit facility and a $60 million revolver. The maturity of the credit agreement is expected to range from five to six years.

Sabra's revolver is expected to have a three- to five-year maturity and a $100 million accordion feature.

And, Sabra's senior unsecured notes are anticipated to have an eight-year maturity.

No commitments have been obtained for the financing as of yet.

Proceeds from the new debt will be used to repay Sun's 9 1/8% senior subordinated notes and the outstanding term loans under Sun's existing credit facility, and for general corporate purposes.

As was previously reported, Sun is separating into two publicly traded companies, with the new Sun entity providing nursing, rehabilitative and related specialty health care services, and managing the rehabilitation therapy, medical staffing services and hospice businesses.

The other entity, Sabra, will own substantially all of Sun's currently owned real property portfolio and intends to operate as a real estate investment trust.

The separation will be done through a distribution to Sun stockholders of the common stock of the new Sun Healthcare Group.

The separation is expected to be completed in the fourth quarter, subject to regulatory, stockholder, final board and other approvals.

Sun Healthcare is based in Irvine, Calif.

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