ConnectiCare has completed a new credit facility to take advantage of a perfect storm of opportunity to put in place some relatively attractive, low priced capital and pay a dividend to shareholders, explained Bob Dahl, managing director for The Carlyle Group and director for ConnectiCare. Dahl said a number of factors influenced the company's decision to tap the market for the recapitalization.
The Farmington, Conn., headquartered HMO has done very well operationally, the financing market is very strong right now and ConnectiCare is in the healthcare sector, which is viewed as being relatively stable, he noted. Carlyle has a number of investment vehicles that invest in bank loans, so the firm is abreast of the ebbs and flows in the market. "We monitor the market," said Dahl.
The new facility comprises a $100 million "B" loan and a $15 million revolver. The new credit line gives the company ample access to capital and the flexibility for growth, Dahl noted. The new term loan is priced at LIBOR plus 33Ž4% and LIBOR plus 3%. ConnectiCare's previous facility included a $55 million term loan and a $15 million revolver that backed the original acquisition of the company by Carlyle and Liberty Partners. The company had approximately $30 million outstanding on the term loan at the time of the refinancing.
Bank of America and Fleet Bank hold the lead roles on both the current and previous facilities. The banks have a relationship with Carlyle, ConnectiCare and have a broad understanding of the managed-care industry, noted Dahl. Carlyle and Liberty acquired ConnectiCare in the summer of 2001.