Bank of America will be shopping an add-on term loan in the neighborhood of $150 million for Vanguard Health Systems in order to back its $295 million acquisition of five hospitals from Baptist Health System, according to a banker familiar with the situation. The term loan will add to the Nashville healthcare provider's existing $125 million revolver, which is led by B of A and co-documentation agentsWachovia Securities and GE Capital. A bank meeting is set for the first week in December, the banker noted. B of A officials declined to comment.
Vanguard signed the definitive purchase agreement last month, agreeing to pay $247 million in cash and $48 million in equity and subordinated debt securities. The cash portion will come from Vanguard's available funds, proceeds of private sales of its common stock to existing shareholders and the expanded facility. Trip Pilgrim, v.p. of investor relations, declined to comment on the add-on term loan.