Gentiva Health Services' $370 million term loan traded actively after it broke at 100 3/8 in the secondary market last week, according a trader. It moved up to 101-101 1/4 by the end of the first day of trading. Lehman Brothers leads the deal, which is priced at LIBOR plus 2 1/4%, according to Markit. The deal also consists of a $75 million revolver.
The credit backs Gentiva's $454 million acquisition of Healthfield Group. The acquisition price includes Gentiva's assumption of $184 million of Healthfield Group's debt. Moody's Investors Service assigned a Ba3 rating to the term loan and a Ba3 corporate credit rating to Gentiva, which provides home health services. The ratings reflect the large increase in company debt following the acquisition. Moody's expects Gentiva's debt to EBITDA ratio to be more than 4.1 times in the short term. Before the acquisition, Gentiva had no debt and had grown internally, notes the ratings agency in a report. Officials at Gentiva did not return calls.