Credit Suisse First Boston and Morgan Stanley launched syndication last Thursday of a $210 million facility backing WellCare Heath Plans' acquisition of Harmony Health Systems. The debt comprises a four-year, $50 million revolver and five-year, $160 million "B" loan. The revolver and "B" loan are priced at LIBOR plus 3% and LIBOR plus 31/4%, respectively. The revolver carries a 50 basis point commitment fee. There is also $30 million of mezzanine debt.
Harmony is a Medicaid managed-care organization that operates health plans in Illinois and Indiana. WellCare focuses on Medicaid and Medicare and provides healthcare services in Connecticut, Florida and New York. Combined EBITDA is $67.7 million. Senior leverage is 2.4 times and total leverage is 2.8 times, a buyside analyst said. CSFB and Morgan Stanley bankers did not return calls and a WellCare spokeswoman declined comment.