Educate launches $130 million credit facility

By Sara Rosenberg

New York, April 22 - Educate Inc. launched a new $130 million credit facility on Tuesday, according to market sources. JPMorgan is the lead bank on the deal.

The loan consists of a $20 million five-year revolver with an interest rate of Libor plus 375 basis points and a $110 million 51/2-year term loan with an interest rate of Libor plus 425 basis points, sources said.

Proceeds from the credit facility will be used to help fund the acquisition of Sylvan Learning Systems Inc.'s K-12 education operating units. The transaction is expected to close by June 30.

Leverage through the operating company is 2.9 times.

Moody's Investors Service rated the deal B1 and Standard & Poor's rated the deal B+.

Educate, formed by the equity firm Apollo Management LP, is based in Baltimore.

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