Eresearch Technology Said to Increase Term Loan to $255 MillionMichael Amato
Eresearch Technology Inc. increased a term loan it’s seeking to $255 million from $220 million, according to a person with knowledge of the transaction.
The provider of healthcare research services will use the debt to refinance borrowings and finance a dividend, said the person, who asked not to be identified because the information is private. The $35 million increase, along with $15 million of cash on the company’s balance sheet, will be used to fund a $50 million payout, said the person.
The debt maturing in May 2018, will pay interest at 4.75 percentage points more than the London interbank offered rate, the person said. Libor, a rate banks say they can borrow in dollars from each other, will have a 1.25 percent floor.
Eresearch is proposing to sell the loan at 99.5 cents on the dollar, the person said, reducing proceeds for the company and boosting the yield to investors.
Lenders are being offered one-year soft-call protection of 101 cents, meaning the company would have to pay 1 cent more than face value to refinance the debt during the first year, according to the person.
Credit Suisse Group AG is arranging the financing and commitments are due by 5 p.m. today in New York, the person said.