LifePoint to launch up to $1.725 billion credit facility Thursday

By Sara Rosenberg

New York, March 21 - LifePoint Hospitals Inc. has scheduled a bank meeting for Thursday morning to launch its proposed credit facility, according to a market source, who said that details on the credit facility should come out in the next day or so.

Citigroup is the sole lead bank on the deal.

Proceeds will be used to finance the acquisition of Province Healthcare Co., refinance Province Healthcare's existing debt, refinance LifePoint's credit facility and provide for the ongoing working capital and general corporate needs of LifePoint Hospitals.

According to a commitment letter, the facility can be sized up to $1.725 billion consisting of up to $1.325 billion in term loans and up to a $400 million revolving credit facility that is expected to be undrawn at closing.

However, in a conference call held last summer, company officials said that the $1.325 billion is committed to come in the form of one large seven-year term loan B with an interest rate of Libor plus 225 basis points.

Officials also said there was some flexibility in terms of the capital structure, so there is some possibility that it won't be all bank debt financed, but rather that some convertibles or high-yield bonds may possibly be issued.

Under the acquisition agreement, LifePoint will purchase Province for $1.7 billion in cash, stock and the assumption of debt. The businesses of LifePoint and Province will be combined under a newly formed company.

LifePoint is a Brentwood, Tenn., operator of hospitals. Province is a Brentwood, Tenn., owner, leaser and manager of hospitals.

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