Wachovia Securities has launched a $260 million bank debt refinancing for eldercare company Genesis HealthCare Corp. (GHC). The bank debt, split between a $75 million, five-year revolver, and a $185 million, seven-year "B" loan, refinances debt held by Genesis Health Ventures (GHV) and backs the spin-off of GHC from GHV. Pricing on the revolver is LIBOR plus 23/4%, while pricing on the "B" loan is LIBOR plus 3%.
GHC, a nursing-home subsidiary of GHV, is being spunoff and will issue $200 million of notes, the proceeds of which will be used to pay down some of GHV's $622 million debt, explained Lauri Zimmerman, who is responsible for investor relations at Genesis. "Genesis Health Ventures will eventually change its name to NeighbourCare [operating the company's pharmacy operations] and will then issue notes to refinance the remaining debt," Zimmerman said. She added that certain mortgages would be excluded.
GHV emerged from Chapter 11 in 2001. First Union, Goldman Sachs and GE Capital lead the $515 million senior secured credit facility, which funded the plan of reorganization. Of this senior debt, $247 million remained on the term loan and $68.8 million on a delayed-draw term loan, as of June, said Zimmerman. It could not be ascertained if Goldman is playing a role in the new financing. GE is a documentation agent on the existing deal, but is not a lead in the new deal. Officials at GE declined comment. Zimmerman also declined comment on all aspects relating to the banks, while Goldman and Wachovia bankers did not return calls.