Team Health launches downsized $865 million eight-year notes at 6 3/8%; pricing Thursday

By Paul A. Harris

Portland, Ore., Jan. 12 – Team Health Holdings, Inc. launched its downsized $865 million offering of eight-year senior notes (Caa1/CCC+/CCC+) at 6 3/8% on Thursday morning, 12.5 basis points inside of the 6½% to 6¾% official talk, according to a market source.

The deal is set to price Thursday.

The Rule 144A and Regulation S for life offering, said to be playing to an order book that is at least four-times oversubscribed, was downsized by $150 million from $1,015,000,000 on Wednesday, with proceeds shifted to the concurrent bank loan.

Barclays in the lead left bookrunner. J.P. Morgan Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC and RBC Capital Markets LLC are the joint bookrunners for the high-yield offering.

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.

The issuing entity will be Tennessee Merger Sub, Inc., which is to be merged with Team Health Holdings.

Proceeds, plus cash contributions from certain investment funds affiliated with sponsor Blackstone, will be used to help fund the leveraged buyout of the Knoxville, Tenn.-based physician services organization by Blackstone.

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