...As Kinetic Retires Amortizing Debt

  • 31 Aug 2003
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Kinetic Concepts has completed a comprehensive recapitalization plan that includes a new $580 million credit facility, taking advantage of the refinancing opportunity to replace amortizing debt. "Over the next several years the prior loans were maturing," said Jim Farrell, a managing director at Fremont Partners--an equity sponsor to Kinetic--and a Kinetic director. He explained that these loans were starting to meet their peak amortization period and the company also had other high-yield debt that was coming due over the next couple of years. In addition to the credit facility, the recap includes the issuance of $205 million of series A 73/8% senior subordinated notes and more than $263 million series A convertible preferred stock.

The new financing was used to replace the company's existing credit facility, redeem all of Kinetic's 95/8% senior subordinated notes due 2007 and to tender almost $590 million of Kinetic's outstanding common stock and vested options. Prior to this transaction, the company had $11.742 million outstanding on its "A" term loan, $57.068 million on each of its "B" and "C" pieces, $62.47 million on its "D" tranche and $19.878 million on its "E" loan. The loans bore effective interest rates between 3.67- 4.96% taking into account existing interest rate hedging arrangements and fees related to letters of credit and unused commitments. The new loan is priced at LIBOR plus 23/4% on the term loan and LIBOR plus 21/2% on the revolver.

Morgan Stanley and Credit Suisse First Boston lead the bank debt. "The company has strong outstanding relationships with both," said Farrell, regarding the choice for the lead banks.

  • 31 Aug 2003

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 BNP Paribas 14,443 29 18.07
2 Bank of America Merrill Lynch (BAML) 8,264 27 10.34
3 Lloyds Bank 7,329 24 9.17
4 Citi 6,748 19 8.44
5 JP Morgan 5,220 8 6.53

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
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  • Today
1 Citi 118,616.77 341 11.09%
2 Bank of America Merrill Lynch 94,721.79 272 8.85%
3 JPMorgan 92,612.23 269 8.66%
4 Wells Fargo Securities 82,597.19 239 7.72%
5 Credit Suisse 70,475.74 184 6.59%