2nd UPDATE: Care UK Plans Bond To Finance Bridgepoint Buyout

9th Jul 2010 15:38

(Adds lead managers.) By Michael Wilson Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Care UK Health and Social Care PLC, the parent company of Care UK Limited, plans to sell GBP250 million of seven-year senior secured bonds to finance the acquisition of the company by private-equity company Bridgepoint, the company said Friday. BNP Paribas SA, Citigroup Inc., HSBC Bank Plc, ING Groep NV and the Royal Bank of Scotland PLC have been appointed as bookrunners on the deal, which will launch and price following a roadshow next week. The bonds will be guaranteed on a senior secured basis by Care UK Health & Social Care Newco Limited, Care UK and other subsidiaries of the company. Proceeds from the transaction will be used to "...partially fund, along with new equity invested by Bridgepoint and management, the acquisition of Care UK and the associated transaction costs," the company said. Care UK was acquired by Bridgepoint earlier this year for around GBP420 million. A group of banks comprising Bank of Ireland, BNP Paribas, HSBC, ING, Lloyds Banking Group and Societe Generale SA, arranged a EUR210 million senior loan to back the transaction as well as a small revolving credit facility. The senior loan was not drawn and Bridgepoint instead chose to fund the acquisition using cash raised through the sale of the new bond. Since the start of the acquisition, Bridgepoint has said that it would explore a range of financing options. The company has been prudent in capitalizing on the recent rebound in Europe's high-yield bond market as the instruments offer longer maturities and less restrictive covenant and amortization terms than would be available through bank loan financing. The offering is seen as a test of high-yield investor appetite for leveraged buyout companies. If the deal goes ahead and draws good demand, it could open the way for other leveraged buyout companies to refinance themselves via the bond market. -By Michael Wilson, Dow Jones Newswires; 44 20 7842 9349; [email protected] (END) Dow Jones Newswires July 09, 2010 10:38 ET (14:38 GMT)