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Invacare to price $125 million of 20-year convertibles as part of refinancing plans
By Kenneth Lim
Boston, Jan. 18 - Invacare Corp. plans to offer $125 million of 20-year senior subordinated convertible notes as part of its debt recapitalization plans, the company said late Wednesday.
Invacare said it plans to refinance its existing debt by pursuing new financing by mid-February, which will include a senior secured revolving loan and term loans along with additional senior debt and/or equity-linked financing.
Moody's Investors Service on Thursday assigned a B3 rating to the proposed convertibles. The agency also assigned Invacare a B1 corporate family and probability-of-default rating. The company's proposed $250 million term loan B due 2013 and $150 million revolving credit facility due 2012 were assigned a Ba2 rating, while the proposed $175 million senior notes due 2015 were assigned a B2 rating.
Standard & Poor's rated the planned convertibles CCC+. Invacare's corporate credit rating was assigned B by S&P, while the term loan and revolver were rated B+. S&P rated the senior unsecured notes B-.
Invacare is an Elyria, Ohio-based maker of non-acute health care products.
Invacare expects the new financing to result in total capacity of about $700 million, which will be used to refinance its existing revolving loan, private placement notes and asset-backed securitization that totaled about $573 million as at end-2006.
The weighted average interest rate of the new facilities and securities is estimated at 6.5% to 9.5%, versus the current 5.9% weighted average.
In the first quarter of 2007, Invacare expects to fork out $12 million to $14 million in make-whole payments to existing holders of its private placement notes.
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