U.S. Renal cuts pricing on incremental loans, adds repricing amendment

By Sara Rosenberg

New York, Aug. 6 - U.S. Renal Care Inc. reduced pricing on its $335 million incremental first-lien term loan (Ba3/B) due July 3, 2019 to Libor plus 425 basis points from talk of Libor plus 450 bps to 475 bps and added a step-down to Libor plus 400 bps at 5 times total net opco leverage, according to a market source.

Also, the offer price on the incremental first-lien loan was changed to 99 from 98, the source said.

The incremental first-lien loan still has a 1% Libor floor and 101 soft call protection for one year.

In addition, the company is now asking to reprice its existing $302 million first-lien term loan due July 3, 2019 to Libor plus 425 bps with a step-down to Libor plus 400 bps at 5 times total net opco leverage, a 1% Libor floor and a par offer price, the source said.

The repriced first-lien term loan has 101 soft call protection for one year.

The repricing will take the first-lien term loan down from Libor plus 500 bps with a 1.25% Libor floor.

Furthermore, pricing on the company's $160 million incremental second-lien term loan (B3/CCC+) due Jan. 3, 2020 was decreased to Libor plus 750 bps from Libor plus 800 bps, the source remarked.

As before, the second-lien term loan has a 1% Libor floor and a discount of 98 and is non-callable for one year, then at 102 in year two and 101 in year three.

Recommitments for the incremental debt were due by 5 p.m. ET on Tuesday, and signatures for the repricing amendment are due at noon ET on Wednesday.

The incremental and existing first-lien term loans will be a single fungible tranche, the source added.

Proceeds from the incremental debt will be used to finance the company's acquisition of Ambulatory Services of America Inc.

Barclays, RBC Capital Markets, Goldman Sachs Bank USA and SunTrust Robinson Humphrey Inc. are the bookrunners on the deal.

Closing is expected this month.

U.S. Renal is a Plano, Texas-based developer, acquirer and operator of outpatient treatment centers for persons suffering from chronic kidney failure. Ambulatory Services is a Brentwood, Tenn.-based health care services company that provides alternative site services in partnership with physicians.

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