Surgery Center ups first-, second-lien loan sizes, cancels holdco loan

By Sara Rosenberg

New York, July 18 – Surgery Center Holdings Inc. (Surgery Partners) upsized its six-year first-lien term loan to $870 million from $820 million and its seven-year second-lien term loan to $490 million from $440 million and eliminated plans for a $100 million holdco term loan, according to a market source.

In addition, pricing on the first-lien term loan was lowered to Libor plus 425 basis points from talk of Libor plus 450 bps to 475 bps and pricing on the second-lien term loan was trimmed to Libor plus 750 bps from talk of Libor plus 775 bps to 800 bps, the source said.

Also, the original issue discount on the first-lien term loan was tightened to 99½ from 99, while the discount on the second-lien loan remained at 99.

Both term loan still have a 1% Libor floor, the first-lien term loan still has 101 soft call protection for one year and the second-lien loan still has call protection of 103 in year one, 102 in year two and 101 in year three.

Price talk on the cancelled holdco loan had been 12% to 12.5% PIK and there was call protection of 103 in year one, 102 in year two and 101 in year three, but the debt was callable at 101 only in year one for a qualified equity offering.

The company’s $1.44 billion credit facility also provides for an $80 million revolver.

Recommitments were due at 3 p.m. ET on Friday.

Jefferies Finance LLC, KKR Capital and MCS Capital are leading the financing.

Proceeds will be used to fund the $792 million acquisition of Symbion Holdings Corp.

Opco first-lien leverage is now 4.73 times, up from 4.5 times under the original structure, and total leverage is 7.2 times, up from 6.7 times, including $25 million of synergies, the source added.

Closing is expected in the fourth quarter, subject to customary conditions and required regulatory approvals.

With the transaction, Symbion will redeem its 11%/11¾% senior pay-in-kind toggle notes due 2015, 8% senior secured notes due 2016 and 8% senior PIK exchangeable notes due 2017.

Surgery Center, a portfolio company of HIG Capital LLC, is a Chicago-based owner and operator of Ambulatory Surgery Centers. Symbion, a portfolio company of Crestview Partners, is a Nashville-based owner and operator of short-stay surgical facilities.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.