Universal Health Said to Set Lower Rate on $746 Million Loan
Bank of America Corp., JPMorgan Chase & Co., Goldman Sachs Group Inc., Royal Bank of Scotland and SunTrust Banks Inc. (STI) are arranging the transaction, which may pay interest at 2.25 percentage points to 2.5 percentage points more than the London interbank offered rate, said the person, who asked not to be identified because the deal is private. There won’t be a minimum on the lending benchmark.
The debt, due in 2016, will refinance outstandings under a $1.6 billion loan obtained in 2011 that began paying interest at 2.75 percentage points more than the London interbank offered rate with a 1 percent minimum, according to data compiled by Bloomberg.
Lenders are offered the debt at par, and will receive six months of 101 soft-call protection, meaning that Universal Health will have to pay a one-cent premium to reprice the debt in its first six months, the person said.
The banks are asking lenders to submit commitments by May 9 at 5 p.m. in New York, the person said.
Steve Filton, chief financial officer of King of Prussia, Pennsylvania-based Universal Health, didn’t immediately return a telephone call seeking comment.
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