Cano Health to launch $685 million credit facilities on Thursday

By Sara Rosenberg

New York, Dec. 2 – Cano Health LLC is scheduled to hold a lender call at noon ET on Thursday to launch $685 million of credit facilities, according to a market source.

Credit Suisse Securities (USA) LLC is the lead arranger on the deal.

The facilities consist of a $30 million revolver, a $480 million funded seven-year covenant-lite first-lien term loan and a $175 million delayed-draw covenant-lite first-lien term loan, the source said.

The strip of funded and delayed-draw term loan debt is being talked at Libor plus 500 basis points to 525 bps with a 25 bps step-down at special purpose acquisition company closing and/or a 25 bps step-down at B2/B corporate family ratings, a 0.75% Libor floor and an original issue discount of 99, the source continued.

Included in the term loan debt is 101 soft call protection for six months.

The delayed-draw term loan has a ticking fee of half the margin from days 31 to 60 and the full margin thereafter.

Expected corporate family and first-lien loan ratings are B3/B-.

Commitments are due at 5 p.m. ET on Dec. 17, the source added.

Proceeds will be used to refinance existing debt and fund a shareholder distribution.

In November, the company announced a merger agreement with Jaws Acquisition Corp., a special purpose acquisition company, in a transaction that values Cano Health at about $4.4 billion.

The business combination is expected to deliver up to $1.49 billion of gross proceeds, including the contribution of up to $690 million of cash held in Jaws Acquisition’s trust account and an $800 million concurrent private placement of common stock of the combined company.

Closing on the merger is expected at the end of the first quarter or the beginning of the second quarter of 2021, subject to approval by Jaws Acquisition’s shareholders and other customary conditions.

Cano Health is a Miami-based tech-powered, value-based care delivery platform.

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