La Petite Academy brought in Credit Suisse to co-lead its new $215 million credit facility and the bank did a good job of attracting investors to its book, said Neil Dyment, cfo. CS leads the new deal with JPMorgan, which was the sole lead on its previous facility. He declined to comment on why the company chose to add CS to the deal, which closed in April. La Petite is owned by JPMorgan Partners and senior management.
The education and child care provider entered into a $110 million delayed-draw first lien; a $85 million second lien and a $20 million revolver. The revolver includes a sub facility for letters of credit. Pricing is LIBOR plus 3% on the first lien and LIBOR plus 7 1/4% on the second lien. The facility pays down $32 million of term debt, a $25 million revolver and $145 million of 10% '08 senior notes. Pricing on the previous loans was LIBOR plus 4 1/4%.
Dyment said pricing overall was "fair" for its credit ratings, although he felt the second lien was priced a little high, which he attributed to the company's high leverage. In a report,Moody's Investors Service said its ratings of the company it assigned a B1 to the first lien and a B3 to the second lien are constrained by high leverage and reflect its expectation of adjusted debt to EBITDA ratios above five times in the near term. Reduction in leverage to adjusted debt to EBITDA ratios closer to four times could lead to a positive ratings outlook, it added.
La Petite Academy is the second largest for-profit preschool provider in the U.S. It offers full-time and part-time educational, developmental and child care programs for children between six weeks and 12 years old.