Bloomberg News

RegionalCare Said to Set Rates on $295 Million Buyout Loan

October 19, 2011

(Updates with commitment deadline in fifth paragraph)

Oct. 19 (Bloomberg) -- RegionalCare Hospital Partners Inc., a provider of health-care services, set the interest rate on a $295 million first-lien term loan it’s seeking to back its purchase of Essent Healthcare Inc., according to a person with knowledge of the transaction.

The debt will pay 6.25 percentage points to 6.5 percentage points more than the London interbank offered rate, said the person, who declined to be identified because the terms are private. Libor, a rate banks charge to lend to each other, will have a 1.5 percent floor.

RegionalCare is proposing to sell the loan at 96 cents to 97 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.

The first-lien term debt will have one-year soft-call protection of 101 cents, meaning Brentwood, Tennessee-based RegionalCare would have to pay lenders 1 cent more than face value to refinance the debt during the first year, the person said.

Citigroup Inc. is arranging the deal and lenders must submit commitments by Oct. 31 at 5 p.m. in New York.

The company is also seeking a $100 million revolving line of credit due in five years and a $65 million second-lien term loan due in 7 1/2 years, according to data compiled by Bloomberg.

John Bakewell, chief financial officer of RegionalCare, declined to comment.

First-lien debt is repaid first in a bankruptcy or liquidation, second-lien debt is repaid next. In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.

--Editors: Faris Khan, Chapin Wright

To contact the reporter on this story: Michael Amato in New York at

To contact the editor responsible for this story: Faris Khan at

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