March 8, 2018 / 11:33 AM / 9 months ago

Elysium attempts debt increase for more acquisitions

LONDON, March 8 (LPC) - UK mental healthcare facilities operator Elysium Healthcare, which owns some of the former Priory clinics, has launched a £275m term loan to refinance existing debt and fund acquisitions, banking sources said.

JP Morgan and Jefferies are leading the leveraged loan financing that will be used alongside £42m of new equity to fund three new acquisitions and develop new and existing sites.

It is a new client for JP Morgan, the sources said.

The £275m seven-year term loan B is offered at 525bp over Libor with a 0% floor, the same price as the existing term loan. It is offered at 98.5-99 OID and 101 soft-call for six months, the sources said.

Corporate and facility ratings are B3/B, with a recovery rating of 3. The loan is also offered with a leveraged covenant.

A bank meeting is set to take place on March 12 to show the deal to investors, which have been asked to commit to the financing by March 26.

There is also a £55m revolving credit facility.

Elysium was formed in October 2016 when BC Partners acquired a portfolio of 22 mental health facilities from Acadia Healthcare. The facilities were former Priory clinics.

Elysium closed a £155m term loan B in March 2017 backing its buyout by BC Partners, after a syndication process that took just over three months.

AIB, ING and RBS joined BNP Paribas and Jefferies as mandated lead arrangers and bookrunners on that term loan, which was increased to £155m prior to close following the tack-on acquisition of two additional facilities, bringing the total number of facilities up to 24.

That loan allocated at 97.5 OID.

That loan was originally launched at £200m in November 2016, but was reduced to £133m in December, after agreeing a sale-and-leaseback transaction on its property portfolio.

Syndication to the group of banks and some funds was delayed to accommodate the sale and leaseback in December and the tack-on acquisitions in January.

Editing by Christopher Mangham

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