Oxford Health Plans' $450 million credit oversubscribed last Thursday after Bank of America and Credit Suisse First Boston added a 25 basis point upfront fee to the $400 million "B" loan. A banker familiar with the situation said the deal attracted more than 35 ticket holders with pricing on the $400 million "B" loan set at LIBOR plus 23/4%. The banker said the six-year loan landed at the high end of the initial LIBOR plus 21/2-23/4% price talk because of investors' demands for the rate. The five-year, $50 million revolver--priced at LIBOR plus 21/4% with a commitment fee of 50 basis points--was oversubscribed, he added. Gary Frazier, senior v.p. of investor relations at Oxford Health, declined to comment.
The funds will be used to pay Oxford Health's $208 million obligation to a $225 million class action litigation settlement, as well as to refinance $120 million of existing debt and for general corporate purposes. The company's previous $250 million facility, led by CSFB and Deutsche Bank, priced in the LIBOR plus 3-31/2% range. Calls to B of A officials were not returned, while a CSFB official declined to comment.