By Paul A. Harris
Portland, Ore., July 11 – Co-issuers Covenant Surgical Partners, Inc. and Consolidated Pathology, Inc. priced an upsized $130 million issue of five-year senior secured notes at par to yield 8¾% on Friday, according to an informed source.
The deal was upsized from $120 million.
The yield printed at the tight end of the 8¾% to 9% yield talk.
Timing was moved forward. Previously the deal was expected to be in the market into the week ahead.
Moody's Investors Service has assigned its B3 rating to the notes. Standard & Poor’s rates the notes at B-. Those ratings factor in the upsized amount, according to the source.
Imperial Capital LLC was the bookrunner.
The notes become callable after two years at par plus 75% of the coupon, with the call premium declining ratably thereafter in six-month intervals.
Proceeds will be used to refinance debt, as well as to fund future acquisitions and for general corporate purposes. Proceeds resulting from the $10 million upsizing go to the balance sheet for acquisitions.
Covenant Surgical Partners is a privately held owner and operator of 23 ambulatory surgery centers across 14 states. Consolidated Pathology, an affiliate of Covenant, owns the pathology labs managed by Covenant.
Both are located in Nashville, Tenn.
| Issuers: | Covenant Surgical Partners, Inc. and Consolidated Pathology, Inc.
|
| Amount: | $130 million, increased from $120 million
|
| Maturity: | Aug. 1, 2019
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| Securities: | Senior secured notes
|
| Bookrunner: | Imperial Capital LLC
|
| Coupon: | 8¾%
|
| Price: | Par
|
| Yield: | 8¾%
|
| First call: | Aug. 1, 2016 at 106.563
|
| Trade date: | July 11
|
| Settlement date: | July 16
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B-
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 8¾% to 9%
|
| Marketing: | Roadshow
|
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