Bear Stearns is leading a $420 million credit facility for MMM Holdings, the largest healthcare HMO in Puerto Rico. The funds will back its acquisition of NAMM Holdings. The deal consists of a five-year, $20 million revolver and a six-year, $400 million term loan, according to a lender.
Price talk is LIBOR plus 3 1/2% on the revolver and LIBOR plus 3 3/4%-4% on the term loan. A bank meeting is scheduled for Tuesday. The facility will also refinance debt and pay a dividend to the sponsor, The Strauss Group, which is the controlling shareholder of MMM and holds a minority interest in NAMM. The holding companies will become subsidiaries of a new holding company, Aveta Holdings, which will be the guarantor of the loan.
MMM has a 75% market share in Puerto Rico with $93.5 million EBITDA for the 12-month period ending June 30. The closing leverage will be 4.3 times, all senior, but is expected to be lowered by winter. NAMM is based in California and contracts with health care benefit companies to provide medical assistance to Medicare patients. Moody's Investors Service assigned a B2 rating to the debt.