Kindred At Home reworks first- and second-lien term loan pricing

By Sara Rosenberg

New York, June 21 – Kindred At Home lifted pricing on its $1.35 billion seven-year covenant-light first-lien term loan (B1/B) and $850 million seven-year covenant-light first-lien delayed-draw term loan (B1/B) to Libor plus 375 basis points from talk in the range of Libor plus 325 bps to 350 bps, and lowered pricing on its $475 million eight-year second-lien term loan (Caa1/CCC+) to Libor plus 700 bps from talk in the range of Libor plus 725 bps to 750 bps, according to a market source.

Furthermore, the original issue discount on the first-lien term loan debt widened to 99 from 99.5 and the 101 soft call protection was extended to one year from six months, the source said.

The first-lien term loan debt still has a 0% Libor floor, and the second-lien term loan still has a 0% Libor floor, a discount of 99 and hard call protection of 102 in year one and 101 in year two.

J.P. Morgan Securities LLC, Morgan Stanley Senior Funding Inc., Citigroup Global Markets Inc., Goldman Sachs Bank USA, Bank of America Merrill Lynch, Capital One, RBC Capital Markets and Wells Fargo Securities LLC are the leads on the $2,675,000,000 in term loans.

Proceeds will be used with $1.94 billion in equity and cash to help fund the buyout of Louisville, Ky.-based Kindred Healthcare Inc. by TPG Capital, Welsh, Carson, Anderson & Stowe (WCAS) and Humana Inc., refinance Kindred’s existing credit facilities and senior notes and for working capital and general corporate purposes.

Also, the debt will be used to help fund Kindred At Home’s subsequent merger with Curo Health Services, a hospice operator.

Under the agreement, Kindred stockholders will receive $9 in cash for each share of common stock they hold. The purchase price is about $4.1 billion in cash, including the assumption or repayment of net debt.

Immediately following the buyout, Kindred’s home health, hospice and community care businesses (Kindred At Home) will be separated from Kindred and operated as a stand-alone company owned 40% by Humana, with the remaining 60% owned by TPG and WCAS.

The long term acute care hospitals, inpatient rehabilitation hospitals and contract rehabilitation services businesses will be operated as a separate specialty hospital company owned by TPG and WCAS (Kindred Healthcare).

Curo is being bought by TPG Capital, WCAS and Humana for about $1.4 billion.

Closing on the Kindred transaction is expected this summer, subject to the approval by the stockholders of Kindred, the receipt of some licensure and regulatory approvals, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 and other customary conditions.

Closing on the Curo acquisition is expected this summer, after the closing of the Kindred At Home buyout, subject to state and federal regulatory approvals and other customary conditions.

© 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.