By Paul A. Harris
Portland, Ore., Jan. 12 – Team Health Holdings, Inc. launched and priced a downsized $865 million issue of eight-year senior notes (Caa1/CCC+/CCC+) at par to yield 6 3/8% on Thursday, according to a market source.
The deal size was decreased from $1,015,000,000 as $150 million of proceeds were shifted to the concurrent bank loan.
The yield printed 12.5 basis points inside the 6½% to 6¾% yield talk. During the time that the deal was in the market pricing ratcheted down from initial thoughts around 7%, a buyside source said.
The deal was said to be playing to an order book that was at least four times oversubscribed.
Barclays was the lead left bookrunner. J.P. Morgan Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC and RBC Capital Markets LLC were the joint bookrunners.
The issuing entity will be Tennessee Merger Sub, Inc., which is to be merged with Team Health Holdings.
Proceeds, plus cash contributions from investment funds affiliated with sponsor Blackstone, will be used to help fund the LBO of the Knoxville, Tenn.-based physician services organization by Blackstone.
| Issuer: | Tennessee Merger Sub, Inc. (to be merged into Team Health Holdings, Inc.)
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| Amount: | $865 million, decreased from $1,015,000,000
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| Maturity: | Feb. 1, 2025
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| Securities: | Senior notes
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| Left lead bookrunner: | Barclays
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| Joint bookrunners: | J.P. Morgan Securities LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC,
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| RBC Capital Markets LLC
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| Coupon: | 6 3/8%
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| Price: | Par
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| Yield: | 6 3/8%
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| First call: | Feb. 1, 2020 at 103.188
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| Equity clawback: | For 40% at 106.375 until Feb. 1, 2020
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| Trade date: | Jan. 12
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| Settlement date: | Feb. 1
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| Ratings: | Moody’s: Caa1
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| Standard & Poor’s: CCC+
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| Fitch: CCC+
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 6½% to 6¾%
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| Marketing: | Roadshow
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