Trident USA Health Services, a provider of outsourced health-care diagnostic services, is seeking $275 million in loans to support its dividend recapitalization, according to a person with knowledge of the transaction.
A five-year $175 million first-lien term loan will pay interest at 5.25 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 say they can borrow in dollars from each other, will have a floor of 1.25 percent.
Trident is proposing to sell the loan at 98.5 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.
Lenders are being offered one-year soft-call protection of 101 cents, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year, the person said.
A 5.5-year $100 million second-lien term piece will pay interest at 9 percentage points more than Libor with a 1.25 percent floor, the person said. The deal is expected to be sold to investors at 97 cents on the dollar.
Trident won’t be able to refinance the second-lien portion during the first year, then can do so at 103 cents on the dollar in the second year, 102 cents in the third year and 101 cents in the fourth year, according to the person.
Credit Suisse Group AG is arranging the financing for the Sparks, Maryland-based company and will host a lender meeting April 3 at 10 a.m. in New York, the person said.
Mark Parrish, chief executive officer of Trident, declined to comment.
First-lien debt is repaid first in a bankruptcy or liquidation, second-lien debt is repaid next.
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