Caremark Rx signed a $550 million credit facility this month for operating expenses, sticking with the bank group that had stuck with it. "We had discussions [with other banks], but we chose to stay with the group that had supported us when we weren't as good of a credit risk," said Howard McLure, executive v.p. and cfo. Bank of America is the lead arranger. J.P. Morgan Chase is the syndication agent, and First Union National Securities is the documentation agent. McLure added that the deal was well supported in the market. "We ended up with two-and-a half times what we went out for," he said. The credit replaces a $400 million deal due to expire in June. McLure explained that the company was able to secure a larger deal by coming through on promises it made to its lenders.
McClure said the company also underwent restructuring, which included selling off its physicians practice management branch. "It was an underperforming asset, one of the dogs of Wall Street in the early 1990s," he said. Pricing is LIBOR plus 23/4 % for the $300 million revolver and LIBOR plus 3% for the $300 million term loan. McLure said it is subject to reduction based on ratio of debt to EBITDA. "Pricing is always too high, but we're happy with it," he said.