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Envision talks downsized $1.23 billion eight-year notes at 8¾% area; pricing Friday
By Paul A. Harris
Portland, Ore., Sept. 28 – Envision Healthcare Corp. talked its downsized $1,225,000,000 offering of eight-year senior notes (Caa1) to yield in the 8¾% area, according to market sources.
Books close at 11 a.m. ET on Friday, and the deal is set to price thereafter.
The size of the notes offering decreased from $1,625,000,000 with $400 million of proceeds shifted to the concurrent term loan, increasing its size to $5.45 billion from $5.05 billion.
Talk on the bonds comes tight to earlier whisper of 8¾% to 9%, as well as tight to initial price talk in the high 8% area, sources say.
Earlier in the week the deal was heard to be going very well at that initial price talk, a trader said.
Timing on the notes offering is accelerated. A roadshow that had been expected to continue into the Oct. 1 week was shortened.
Citigroup Global Markets Inc. is the left bookrunner. Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Barclays, Goldman Sachs & Co. LLC, Jefferies LLC, UBS Investment Bank, KKR Capital Markets, SG CIB, RBC Capital Markets LLC, HSBC Securities, Mizuho Securities USA Inc., BMO Securities, SunTrust Robinson Humphrey Inc. and Credit Agricole CIB are the joint bookrunners.
The notes become callable after three years at par plus 50% of the coupon and feature a three-year 40% equity clawback and a 101% poison put.
Proceeds will be used to help fund the buyout of the company by KKR for $46.00 per share in cash, or about $9.9 billion including the assumption or repayment of debt.
The initial issuing entity will be Enterprise Merger Sub Inc., which will become Envision Healthcare Corp. when the buyout closes.
Envision is a Nashville, Tenn.-based provider of physician-led services and post-acute care and ambulatory surgery services.
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