Pro rata investors were looking at VITAS Healthcare Corp.'s $35 million second-lien term loan in addition to the first-lien $25 million revolver and $60 million term loan, a banker close to the deal said. He did not cite specific pro-rata lenders, but added that standard second-lien investors were also eyeing the LIBOR plus 10% priced tranche.
Another banker explained that there are some investors, like Madison Capital Funding, Antares Capital Corp. or Ableco Finance, who buy into both pro rata and second-lien pieces. "But the market is not very deep" with investors that buy both pro rata and second-lien pieces, the banker explained, noting that some other investors may need to be tapped to commit solely to the six-year, second-lien loan in order to fill the tranche out. No official commitments were in for the $120 million deal by the middle of last week, but the banker said interest seemed positive.
Pricing on the five-year revolver and term loan pieces is LIBOR plus 4%. BNP Paribas is leading the refinancing deal for the Miami-based hospice program operator and care provider. The credit will refinance existing debt, including subordinated debt. VITAS currently has a $50 million term loan and a $15 million revolver priced at LIBOR plus 4%. The company's total leverage is 2.6 times and its senior leverage is 1.56 times, the first banker noted. A BNP Paribas official declined to comment. David Wester, senior v.p., cfo and treasurer of VITAS, did not return calls.