Bank of America is seeking commitments from institutional investors for a $95 million term loan "D" for San Antonio-based, Kinetic Concepts, Inc. Lulu Olson, treasurer, said the bank meeting was held May 9 and that the closing of the deal is anticipated in the first week of June. Pricing is LIBOR plus 31/ 8% for the five-year loan. Deutsche Bank is syndication agent and B of A is lead and administration agent. Fremont Partners, the San Francisco-based investment firm, is primary sponsor for the deal.
The loan will pay down the balance on a $50 million revolver and refinance other outstanding debt arranged in November 1997, including an $8.6 million acquisition line, explained Olson. She said the company decided along with B of A to launch a term loan with a longer maturity, to take advantage of a market that is currently responding favorably to the healthcare sector. Kinetic makes specialized mattresses and pressure relief and pulmonary care products to treat and prevent complications associated with patient immobility.
The paying down of the revolver and the movement towards a longer-term financing will assist cash flow, Olson explained. Kinetic has $27.5 million remaining on a term loan that will amortize in 2003 and $87.075 million combined remaining on a "B" and "C" loan. Pricing is blended at LIBOR plus 3 1/8%. The original loan totaled $530 million according to Capital DATA Loanware.