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October 17, 2011 at 9:28pm
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LPC: Kinetic Concepts carves out TLC for shorter-dated CLOs


Lead agent Bank of America Merrill Lynch is said to have received reverse inquiries from shorter-dated CLOs that would like to pick up the KCI (KCI.N) loan in the primary market. The term loan C is also likely to receive interest from bank lenders.By the end of 2012, roughly 45 percent of outstanding CLOs will end their reinvestment periods, curtailing their ability to actively trade in and out of loans, according to RBS data.The KCI loan now includes a $200 million, five-year revolver, a $1.9-1.95 billion, seven-year term loan B and a $250-300 million, five-year term loan C.The term loan B is talked at 575 basis points over Libor with a 1.25 percent Libor floor and a 95.5-96 original issue discount. The term loan C is talked 75bp inside the term loan B.The term loan B is non-callable for one year and has 101 soft call for the second year. The term loan C has 101 soft call in the first year.Commitments are due Wednesday and closing and funding is slated for November 4.The corporate family rating is B2/B. Financial covenants include a maximum total net leverage covenant and a minimum interest coverage covenant.At launch, the company brought to market a $2.2 billion term loan, along with a $200 million revolver. The term loan was guided at 575bp over Libor with a 1.25 percent floor and a 95.5-96 original issue discount.Proceeds are to back KCI’s $6.3 billion buyout by Apax Partners, the Canada Pension Plan Investment Board and the Public Sector Pension Investment Board.Bank of America Merrill Lynch, Morgan Stanley, Credit Suisse and RBC are arranging the loan, while UBS is a co-manager.Prior to its U.S. launch, the loan was launched to European investors on October 3.The marketing of the bond portion of KCI’s leveraged buyout financing will initially focus on a $1.65 billion equivalent, 7.5-year senior secured second-lien note offering, according to IFR, a Thomson Reuters service. A $900 million, eight-year senior unsecured note tranche will be marketed separately and with a more limited distribution, IFR reported.The equity check will be roughly $1.75 billion, as per a previous SEC filing.Headquartered in San Antonio, Texas, Kinetic Concepts develops, manufactures, and markets therapies and products for the wound care, tissue regeneration and therapeutic support system markets.

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  1. melanyhtaggart posted this