RegionalCare Capella talks $800 million seven-year notes to yield 8 1/8%-8 3/8%; pricing Friday

By Paul A. Harris

Portland, Ore., April 22 – RegionalCare Capella Healthcare talked its $800 million offering of seven-year senior secured notes (B1/CCC+) to yield 8 1/8% to 8 3/8%, according to a market source.

Books close at 1:30 p.m. ET on Friday, and the Rule 144A and Regulation S for life offering is set to price thereafter.

Barclays is the lead left bookrunner. RBC Capital Markets, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, UBS Investment Bank and Citigroup Global Markets Inc. are the joint bookrunners.

The notes become callable after three years at par plus 75% of coupon and feature a three-year 40% equity clawback at par plus the coupon and a 101% poison put.

Proceeds will be used to help fund the creation of RegionalCare Capella Healthcare through the merger of RegionalCare Hospital Partners Inc. and Capella Healthcare Inc.

RegionalCare, owned by Apollo Global Management LLC, is a Brentwood, Tenn.-based owner and operator of regional acute care facilities.

Capella, owned by Medical Properties Trust Inc., is a Franklin, Tenn.-based operator of acute care and specialty hospital facilities.

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