Surgery Center talks $430 million eight-year notes at 9½%-9¾%; pricing Thursday

By Paul A. Harris

Portland, Ore., March 28 – Surgery Center Holdings, Inc. talked a $430 million offering of eight-year senior notes (CCC) to yield 9½% to 9¾%, according to market sources.

Official talk comes wide to initial guidance in the 9¼% to 9½% area, a trader said.

There are also covenant changes.

Books close at 2:30 p.m. ET on Thursday, and the Rule 144A for life and Regulation S deal is set to price thereafter.

Jefferies LLC is the lead left bookrunner. KKR Capital Markets and Macquarie Capital are the joint bookrunners.

The notes become callable after three years at par plus 50% of the coupon and feature a 40% equity clawback at par plus the coupon during the non-call period.

The issuing entity is Surgery Partners, Inc., a wholly owned subsidiary of Surgery Center Holdings.

The Nashville-based health care services company plans to use the proceeds, together with cash on the balance sheet, to redeem all of its outstanding 8 7/8% senior notes due 2021.

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