First Health Group has switched lead banks for its new $400 million, five-year revolver, choosing Bank of America over LaSalle Bank. Joe Whitters, cfo of First Health, said the company negotiated with several banks, both inside and outside its current bank group, and decided that B of A had the best capabilities and offered the best services to lead the new credit. LaSalle Bank participated in the new syndicate, in addition to BANK ONE, SunTrust Bank, and BNP Paribas, all of which participated on the old deal.
The new credit replaces a $350 million, five-year revolver that was set to expire by the end of the company's current quarter on June 30. The increased size of the new facility offers the company more flexibility. "We wanted some more financial flexibility and found the market receptive," said Whitters. "We went in with the idea that we wanted to upsize it and bring in some new banks to help fill it up."
The new $400 million, five-year revolver was secured on April 22 and has a pricing of LIBOR plus 11/ 8%. The former credit was priced at LIBOR plus 1%. Whitters attributes increased pricing on the credit to a general hike in pricing trends in the loan market. He noted the degree of difficulty companies face in seeking new financing in an environment of bank consolidation.