Express Scripts completed an $800 million credit facility to finance an acquisition and repay maturing notes. The company's existing bank debt had been put in place in 1999, noted Michael Salamone, v.p. and treasurer. "We needed to expand our borrowing capabilities in order to finance a recent acquisition and it also put us in a position to refinance 95/8% notes that are first callable in June 2004," Salamone said. In January, Express acquired CuraScript, a specialty pharmacy company based in Orlando, Fla., for $335 million. Express is a pharmacy benefits management company.
The company was approached by several banks, but ultimately chose Credit Suisse First Boston and Citibank to lead the financing. "I had a sense that there was ample liquidity in the bank market based on the number of reverse inquires that we were receiving from banks indicating an interest in our financing," Salamone said. He declined to name the other banks. Express has worked with CSFB and Citi in the past. "We had confidence in their approach and capabilities," Salamone said. "We had very smooth negotiations of the terms and syndication all went well."
Pricing on the $200 million "B" loan ended up getting flexed down twice, Salamone noted. The deal hit the market at LIBOR plus 2%, but closed at LIBOR plus 11/2%. The $400 million revolver and $200 million "A" loan also carry a spread of LIBOR plus 11/2%. "It was attractive financing for the company," Salamone concluded.