Summit Health finalizes terms of $1.784B term loan; recommitments due today

A Credit Suisse-led arranger group has finalized terms of Summit Health's first-lien term loan financing, according to sources. Recommitments are due today at noon ET.

The company is repricing and extending its existing $884 million term loan B and issuing an $900 million fungible add-on, which is upsized by $100 million. Proceeds from the add-on will be used to finance tuck-in acquisitions.

Pricing for the seven-year term loan is L+325, with a 0.50% Libor floor and an original issue discount of 99.875 for both the repriced tranche and the incremental. There will be six months of 101 soft call protection for the pro forma $1.784 billion loan.

At talk, the yield to maturity is 3.83%.

The arranger group includes Barclays, Goldman Sachs, Jefferies, Mizuho, ING, KeyBanc Capital Markets, Golub Capital and Regions Capital Markets.

Corporate and facility ratings are B/B1, with stable outlooks, and with a 3 recovery rating from S&P Global Ratings. The borrower is listed under WP CityMD Bidco LLC.

Summit will also upsize its revolver by $75 million, to $275 million, and extend the maturity to five years, according to Moody's.

The issuer was last in the market in January, when it repriced its then $891 million covenant-lite first-lien term loan due August 2026 to L+375 with a 0.75% floor, from L+450 with a 1% floor. That loan was originally placed in 2019 to finance CityMD's acquisition of Summit Medical Group.

Summit Health, backed by Warburg Pincus, is a provider of primary, specialty and urgent care services in New York, New Jersey and Oregon. The company officially rebranded as Summit Health earlier this year.