Covenant Surgical Partners launches term loans at Libor plus 500 bps

By Sara Rosenberg

New York, Sept. 14 – Covenant Surgical Partners Inc. launched on Thursday its $150 million seven-year first-lien term loan and $45 million delayed-draw first-lien term loan with price talk of Libor plus 500 basis points with a 0% Libor floor and an original issue discount of 99, according to a market source.

The term loan debt has 101 soft call protection for six months and a maximum total leverage covenant of 8.5 times, stepping down to 7.5 times at seventh post-close and 6.5 times at 17th quarter post-close, the source said.

The company’s $220 million of credit facilities also include a $25 million revolver.

Goldman Sachs Bank USA and KKR Capital Markets are the leads on the debt.

Commitments are due on Sept. 28, the source added.

Proceeds will be used to help fund the buyout of the company by KKR from DFW Capital Partners, Iroquois Capital Group, PineBridge Investments and other existing shareholders.

Closing is expected in the third quarter, subject to regulatory approvals and other customary conditions.

Covenant Surgical is a Nashville, Tenn.-based acquirer and operator of ambulatory surgery centers and physician practices.

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