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Multiplan Readies $1.3B High Yield Deal with Rare PIK-Toggle Feature

mulitplanAmid broad talk of a high yield market under pressure and as a handful of recent bond offerings are scrapped due to ‘market conditions,’ healthcare management concern Multiplan today unveiled a $1.3 billion transaction sporting a PIK-toggle option, a feature usually found in bullish markets that allows the issuer to pay interest on the debt in cash, or with additional notes.

Proceeds of the offering include the backing of a dividend for the shareholder group, led by private equity firm Hellman & Friedman. The paper will be issued through Polaris International Corp. and comes with call protection at 102, 101, and par. Goldman Sachs (left), Barclays, and Bank of America Merrill Lynch are leading the deal.

To be sure, PIK toggle issuance has been rare of late, with just $1.1 billion of those deals so far this year (before Multiplan), according to LCD: a $550 million April offering backing a pharma/biotech concern Eagle Holding, and a $500 million deal for thermal management company Vertiv, in February.

The Multiplan notes follow a repricing, inked in June, of the company’s $3.2 billion leveraged loan, put in place in May last year to fund H&F’s buyout of the group. That exercise left the loan priced at L+300, with a 1% floor.

MultiPlan provides technology-enabled healthcare-cost-management solutions for the commercial, government, workers’ compensation, auto, and property and casualty markets. — David Cox

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