Rural/Metro upsizes term loan to $180 million, lowers pricing and OID

By Sara Rosenberg

New York, Nov. 6 - Rural/Metro Corp. increased the size of its term loan to $180 million from $150 million and reduced pricing and the original issue discount on the tranche, according to a market source.

The term loan is now priced at Libor plus 500 basis points, down from initial talk of Libor plus 525 bps, and the original issue discount was reduced to 99 from initial talk of 98, the source said.

In addition, pricing on the $40 million revolver was also lowered to Libor plus 500 bps from Libor plus 525, the source continued.

The 2% Libor floor on the term loan and the revolver was left unchanged.

Recommitments are due from lenders on Nov. 12.

RBC is the lead bank on the $220 million deal (Ba3) that will be used to refinance an existing credit facility due in 2011 and help fund a bond tender offer.

The company is currently tendering for its $125 million of 9 7/8% senior subordinated notes due 2015.

Originally, the company was tendering for its roughly $95 million of 12¾% senior discount notes due 2016, but that tender was canceled on Friday and the new one was announced.

The term loan was upsized because the new tender offer is for more bonds than the original proposal.

The tender offer will expire on Dec. 7 and is subject to the credit facility being completed and a majority of the notes being tendered.

Rural/Metro is a Scottsdale, Ariz.-based provider of emergency and non-emergency ambulance services and private fire protection services.

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