A $60 million piece of Integrated Health Services' bank debt traded last week in the 50 1/2 range, with the seller, reportedly TD Securities, taking a $30 million hit on its position. Traders at TD did not return calls for comment and a spokesman for the bank said he could neither confirm nor deny the deal or the bank's position in the debt. TD is a lead arranger on the company's $2.15 billion credit and was in the paper at par, dealers said. But even with the $30 million punch in the nose, the bank made out much better than it would have just months ago, dealers noted. "It was in the 20s less than six months ago, but they bought it at par," one dealer said. "In the end, they haven't lost as much as they would've."
Levels on IHS bank debt are up from the low 40s in late March (LMW, 3/25). The credit's climb is being attributed to the success of its subsidiary, RoTech Medical Corp. "It's performing very well, and health care in general is doing well," a dealer said. Integrated Health, based in Sparks, Md., is a post-acute care provider with 365 nursing homes and 15 specialty hospitals. Calls to the company were not returned.
Integrated Health's credit breaks down into three tranches. Pricing is linked to the company's leverage ratio and ranges from LIBOR plus 3% to LIBOR plus 3 1/2%. Salomon Smith Barney is a lead arranger with TD Securities.