Rural/Metro withdraws $200 million bond offering, increases loan

By Paul A. Harris

St. Louis, Nov. 8 - Rural/Metro Corp. withdrew its proposed $200 million senior notes offering and upsized its term loan to $270 million from $75 million, a market source said on Monday.

RBC Capital Markets, which is leading the bank deal, was also slated to run the books for the bonds.

Following the re-sizing, the amount of the credit facility can be up to $370 million.

Proceeds will be used to refinance the company's existing senior secured revolver, term loan and letter-of-credit facilities, to fund a tender offer for its senior discount notes, to pay off cash collateralized letters of credit and for working capital and general corporate purposes.

The company's president and chief executive officer, Michael P. DiMino, said in a news release that the refinancing is expected to "create substantial savings in interest expense" and the change to an all credit facility structure will provide flexibility for business objectives, while securing lower pricing.

Total and senior leverage will now be 3.75 times, or 3.25 times net, whereas, under the original financing plans, senior leverage would have been 1.1 times and total leverage would have been 3.9 times.

Rural/Metro is a Scottsdale, Ariz.-based provider of medical ambulance response services.

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