R1 RCM intends to place $110 million eight-year 14% PIK toggle notes

By Devika Patel

Knoxville, Tenn., April 17 – Tuesday saw one new private placement – Chicago-based revenue cycle management and physician advisory services provider R1 RCM Inc., which announced a $110 million private placement of eight-year unsecured subordinated PIK toggle notes in connection with its planned merger with Intermedix Holdings, Inc.

R1 RCM is selling $110 million of eight-year notes in a placement that was arranged on Feb. 23 to fund the company’s planned merger with Intermedix.

The investors will be TowerBrook Investors IV (Onshore), LP, TowerBrook Investors IV (892), LP, TowerBrook Investors IV (OS), LP, TowerBrook Investors IV Executive Fund, LP, TowerBrook Investors IV Team Daybreak, LP and Ascension Health Alliance D/B/A Ascension.

The notes are expected to bear interest at 14% initially, increasing by 1% per annum on the third anniversary of the closing date of the merger and by an additional 1% per annum on each subsequent anniversary of the merger until the notes are repaid in full.

Interest will be payable quarterly in cash. However, the company may elect to pay up to 75% of each quarterly interest payment in kind prior to the first anniversary of the merger, up to 50% of each quarterly interest payment in kind prior to the second anniversary of the merger and 25% of each quarterly interest payment in kind after the second anniversary of the merger.

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