CHG Healthcare revises tranche sizes, sets pricing at wide end of talk

By Sara Rosenberg

New York, Oct. 4 - CHG Healthcare Services came out with some changes to the size of its first- and second-lien term loans and finalized pricing on all tranches at the high end of talk, according to a market source.

The six-year first-lien term loan is now sized at $230 million, up from $225 million, and the 61/2-year second-lien term loan is $53 million, down from $60 million, the source said. The five-year revolver was left unchanged at $70 million.

Pricing on the revolver and the first-lien term loan firmed at Libor plus 550 basis points, whereas talk was in the Libor plus 500 bps to 550 bps range, and pricing on the second-lien term loan firmed at Libor plus 950 bps, whereas talk was in the Libor plus 900 bps to 950 bps range, the source continued.

Added to the first-lien term loan is a pricing step-down to Libor plus 525 bps when leverage is less than 4.0 times.

All tranches still have a 1.75% Libor floor.

The first- and second-lien term loans are both being sold at an original issue discount of 98, which is in line with talk for the first-lien loan. The discount on the second-lien loan had previously been to be determined.

As before, the first-lien term loan has 101 soft call protection for one year. Call protection on the second-lien loan emerged as 103 in year one, 102 in year two and 101 in year three, the source remarked. Previously, it was known that the second-lien loan would have call protection, but specifics had not yet been determined.

Barclays, Bank of America and Goldman Sachs are the lead banks on the deal, with Barclays the left lead.

Proceeds will be used to repay debt and fund a dividend.

The downsizing of the credit facility to $353 million from $355 million was completed since the company had more cash on its balance sheet than it previously anticipated, the source explained.

Leverage is 3.5 times through the first-lien, which is the same as before, and total net leverage is 4.3 times, down from around 4.4 times.

CHG Healthcare Services is a Salt Lake City-based health care staffing provider.

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