Bloomberg News

National Healing Increases Rate on $325 Million of Loans

November 23, 2011

(Updates with commitment deadline in fifth paragraph)

Nov. 22 (Bloomberg) -- National Healing Corp., a provider of wound and disease-management solutions, increased the interest rate it will pay on $325 million of loans it’s seeking to finance a merger with Diversified Clinical Services, according to a person with knowledge of the transaction.

A $250 million first-lien term piece will pay 6.75 percentage points more than the London interbank offered rate compared with 6 percentage points initially offered, said the person, who declined to be identified because the deal is private.

The company is proposing to sell the loan at 95 cents on the dollar compared with 97 cents initially proposed, reducing proceeds for the company and boosting the yield to investors, said the person.

A $75 million second-lien portion will pay 10 percentage points more than Libor compared with 9.5 percentage points initially offered, the person said. The second-lien slice will be sold at 94 cents on the dollar compared with 97 cents initially proposed.

Jefferies Group Inc., Bank of Montreal and Royal Bank of Canada are arranging the financing and investors have until 4 p.m. today to submit commitments, said the person.

The Boca Raton, Florida-based company is also seeking a $30 million revolving line of credit due in five years, according to data compiled by Bloomberg.

Jessica Taft, a spokeswoman for National Healing, didn’t respond to an e-mail seeking comment.

First-lien debt is repaid first in a bankruptcy or liquidation, second -lien debt is repaid next. A term loan B is mainly bought by non-bank lenders such as collateralized loan obligations, bank-loan mutual funds and hedge funds.

--Editors: Faris Khan, Chapin Wright

To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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