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Emdeon, Kinetic Concepts bridge loans head for September syndications
By Paul A. Harris
Portland, Ore., Aug. 31 - Dealers are expected to undertake the syndications of bridge loans backing the leveraged buyouts of Emdeon Inc. and Kinetic Concepts Inc. in September, market sources say.
The Emdeon $750 million one-year senior unsecured bridge loan is priced at Libor plus 850 basis points for the first 60 days. Thereafter, interest will be payable at a rate equal to the senior cap. There is a 1.25% Libor floor.
Barclays Capital Inc., Bank of America Merrill Lynch and Citigroup Global Markets Inc. are the leads.
Blackstone Capital Partners VI LP is acquiring the Nashville-based payroll services provider for $19.00 per share in cash in a transaction is valued at about $3 billion.
Meanwhile the Kinetic Concepts LBO is backed by a $900 million senior unsecured bridge loan and a $1.25 billion senior secured second-lien bridge loan, with a portion of the second-lien bridge loan possibly available in euros.
Bank of America Merrill Lynch, Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. are the leads.
Apax Partners, Canada Pension Plan Investment Board and the Public Sector Pension Investment Board are acquiring the San Antonio-based medical technology company for $68.50 per share in cash in a transaction valued at $6.3 billion, including outstanding debt.
Both the Emdeon and Kinetic Concepts bridges are expected to lead to bond deals.
However, should conditions in the high-yield market prove to be excessively volatile in the post Labor Day period, it is possible that bridge loans could be funded, as issuers and dealers await more favorable conditions to sell notes, a syndicate banker said on Wednesday.
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