Bloomberg News

ATI Physical Therapy Said to Set Rate on $285 Million LBO Loan

January 16, 2013

ATI Physical Therapy Inc. set the rate it will pay on a $285 million term loan B it’s seeking to back its buyout by KRG Capital Partners LLC, according to a person with knowledge of the transaction.

The debt will pay interest at 5 percentage points more than the London interbank offered rate, said the person, who asked not to be identified because the information is private. Libor, a rate banks say they can borrow in dollars from each other, will have a 1.25 percent floor.

ATI Physical Therapy is proposing to sell the loan at 99 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.

Jefferies Group Inc. and Ally Commercial Finance LLC are arranging the financing which also includes a $50 million revolving line of credit, according to data compiled by Bloomberg. Investors have until Jan. 30 to let the banks know if they will participate in the deal.

Crescent Mezzanine Partners LP will be providing $160 million of mezzanine debt and equity will account for 47 percent of the transaction, said the person.

KRG Capital acquired the Bolingbrook, Illinois-based operator of physical therapy clinics from GTCR LLC, the data show.

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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