June 5, 2019 / 10:52 AM / 3 months ago

CVC secures €1.6bn Elsan debt in event of a sale

LONDON, June 5 (LPC) - CVC has secured portability on French private hospitals operator Elsan’s €1.6bn debt that will enable it to remain in place in the event of a sale within the next two years, banking sources said.

CVC raised an additional €100m term loan this week to fund upcoming acquisitions and secured a two-year maturity extension on its existing €1.5bn senior loans to April 2024, so management can stay focused on the business without having to worry about a big refinancing, the sources said.

Two-year portability was also secured on the loans, a feature more common in the bond market, to provide stability for the business in case of changes to the shareholder structure, the sources added.

A sale of a company and consequential change of ownership typically triggers a loan repayment but portability enables an existing capital structure to remain in place, something that can be attractive to potential buyers as they don’t need to worry about securing debt financing to back an acquisition.

BNP Paribas and Deutsche Bank were global coordinators on the add-on loan and amend and extend process, while Credit Agricole, Natixis and Societe Generale were bookrunners.

The €100m loan priced at 350bp over Euribor, tighter than the guidance of 375bp, with a 0% floor at par, after overwhelming popularity among leveraged loan investors.

Elsan last tapped the loan market in December 2016 when it secured a €1.305bn add-on and repricing. A €730m add-on term loan and a €575m existing term loan B both priced at 375bp over Euribor with a 0% floor at par. That add-on was to back its acquisition of French competitor MediPole Partenaires.

CVC acquired a majority stake in Vedici in 2014, which then acquired Vitalia in November 2015, renaming as Elsan.

Elsan operates 120 clinics with 25,000 employees. It has 6,500 doctors and services 2m patients each year, according to the firm’s website. (Editing by Christopher Mangham)

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