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DJO Finance LLC, the Blackstone Group LP-owned maker of orthopedic devices, is seeking to amend $943 million of loans to push out maturities and replace existing debt.
The company wants to issue a $300 million term loan to refinance a portion of its senior credit and obtain a five-year $100 million revolving credit line to replace its revolver, according to a regulatory filing today. DJO is also seeking $230 million of senior secured second-priority debt to repurchase $210 million of 10.875 percent notes due in 2014.
The new term loan will be due in September 2017 and pay interest at 5 percentage points more than the London interbank offered rate, according to a person with knowledge of the transaction who declined to be identified because the terms are private. Libor, a rate banks say they can borrow in dollars from each other, will have a 1.25 percent floor.
DJO is proposing to sell the loan at 98 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.
ReAble Therapeutics Inc., an orthopedic device maker owned by Blackstone, purchased DJO for $1.3 billion in 2007.
DJO has $843 million outstanding under a term loan maturing in May 2014, according to data compiled by Bloomberg. The Vista, California-based company’s revolver expires in November 2013, the data show.
The company is also seeking to extend a minimum of 55 percent of a term loan to November 2016 from May 2014, the person said. The extended term loan will pay interest at 5 percentage points more than Libor, the person said.
Lenders are being offered a 25 basis-point fee to agree to the extension and a 25 amendment fee, the person said. A basis- point in 0.01 percentage point.
The company’s 10.875 percent notes rose 0.74 percent today to 102.25 cents, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. That’s up from a low this year of 93.5 cents on the dollar on Jan. 23, the data show.
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