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U.S. Renal upsizes credit facility to $172.5 million, firms spread at Libor plus 450 bps
By Sara Rosenberg
New York, May 17 - U.S. Renal Care Inc. increased the size of its credit facility (B1/B+) to $172.5 million from $155 million and finalized pricing at Libor plus 450 basis points, the tight end of the Libor plus 450 bps to 475 bps talk, according to a market source.
Tranching on the facility now consists of a $132.5 million six-year term loan, up from $125 million, and a $40 million five-year revolver, up from $30 million, the source said.
As before, the entire deal includes a 1.75% Libor floor and was sold at an original issue discount of 99.
Financial covenants include a maximum total leverage ratio, a minimum interest coverage ratio and a minimum fixed-charge coverage ratio.
RBC is the lead bank on the deal.
Proceeds from the credit facility, along with mezzanine debt, will be used to help fund the acquisition of Dialysis Corp. of America Inc. in a transaction valued at about $112 million.
As a result of the term loan upsizing, the mezzanine financing was downsized to $40 million from $47.5 million.
Pricing on the mezzanine debt was left unchanged at 11¼% cash plus 2% PIK, the source added.
Under the terms of the agreement, U.S. Renal Care is tendering for all of the outstanding common shares of Dialysis Corp. of America for $11.25 per share in cash. That tender will be followed by a merger to acquire all remaining outstanding shares at the same cash price paid in the tender offer.
U.S. Renal Care is a Plano, Texas-based provider of outpatient dialysis services. Dialysis Corp. of America is a Linthicum, Md.-based provider of outpatient kidney dialysis centers.
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