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Prospect Medical notes price at 102 to yield 7.97%; terms

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Prospect Medical notes price at 102 to yield 7.97%; terms

Prospect Medical Holdings today completed an add-on offering of 8.375% secured notes due 2019 via bookrunners Morgan Stanley, Credit Suisse, and RBC, according to sources. Terms were finalized at talk and at the proposed issue size of $100 million. The additional notes bring the total outstanding to $425 million. Proceeds from the fungible add-on, along with cash on hand, will be used to fund a distribution to stockholders from parent Ivy Holdings. The company is also seeking consents from holders of the existing 8.375% notes to amend the indenture to allow for the additional issuance and dividend payment and to remove the special call option for 10% of the issue annually at 103, sources note. Prospect Medical in April issued $325 million of the notes to back a dividend recapitalization. The Los Angeles-based hospital operator was taken private by Leonard Green in August 2010 in a $363 million deal. Terms:

 

Issuer Prospect Medical Holdings
Ratings B-/B2
Amount $100 million
Issue add-on secured notes (144A-life)
Coupon 8.375%
Price 102
Yield 7.972%
Spread n/a
Maturity May 1, 2019
Call nc2.5; 1st call @ par +75% of coupon
Trade Nov. 8, 2012
Settle Nov. 16, 2012 (T+5)
Books MS/CS/RBC
Jt Leads
Co’s.
Px talk 102
Notes w/ 35% equity clawback @ 108.375 until 5/1/15; carries T+50 make-whole call; issue size now $425 million.