CHG Healthcare Services seeks $150 million in incremental term loans

By Sara Rosenberg

New York, June 21 - CHG Healthcare Services Inc. is in market with a $110 million add-on covenant-light first-lien term loan due Nov. 19, 2019 and a $40 million add-on second-lien term loan due Nov. 19, 2020, according to a market source.

Pricing on the add-on first-lien term loan is Libor plus 375 basis points with a 1.25% Libor floor, in line with existing first-lien pricing, and the debt is being offered at an original issue discount of 991/2, the source said. There is 101 soft call protection through November 2013.

The add-on second-lien term loan is priced at Libor plus 775 bps with a 1.25% Libor floor, which matches existing second-lien pricing, the source continued.

Goldman Sachs Bank USA, Barclays, Citigroup Global Markets Inc. and Jefferies Finance LLC are leading the deal that launched with a call on Thursday.

Proceeds will be used to fund a dividend.

In connection with the transaction, the company is asking to amend its existing credit facility to allow for the add-on term loans and the dividend payment.

First-lien lenders are being offered a 10 bps amendment fee, and second-lien lenders are being offered a 50 bps amendment fee.

Pro forma for the transaction, leverage through the first-lien tranche would be around 4.83 times and total leverage would be about 6.75 times, based on last-12-months through May 31, 2013 EBITDA of $119.7 million.

Commitments are due on Wednesday, allocations are expected to go out on Thursday and closing is targeted for the week of July 8, the source added.

CHG is a Salt Lake City-based health care staffing firm.

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