RehabCare downsizes term loan to $450 million from $500 million

By Sara Rosenberg

New York, Nov. 17 - RehabCare Group Inc. reduced its term loan to $450 million from $500 million while leaving price talk unchanged at Libor plus 400 basis points with a 2% Libor floor and an original issue discount of 98, according to a market source.

The downsizing was a result of the company raising more equity proceeds than it expected. Last week, RehabCare sold 5.4 million shares of common stock at $24 per share, and then late Monday, the company announced that the underwriters exercised in full their option to purchase an additional 810,000 shares.

Bank of America, RBC and BNP Paribas are the lead banks on the now $575 million senior secured credit facility (Ba3/BB), which still includes a $125 million revolver talked at Libor plus 400 bps.

Proceeds from the credit facility and the equity will be used to fund the acquisition of Triumph HealthCare for $570 million.

Closing on the acquisition is expected to take place on Dec. 1, pending customary closing conditions, including regulatory approvals.

RehabCare is a St. Louis-based provider of physical rehabilitation services. Triumph HealthCare is a Houston-based developer and operator of long-term acute care hospitals.

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