Sources told Bloomberg that Primary Health Care Ltd entered into a AUD 1.25 billion or USD 1.4 billion refinancing scheme to reduce interest in its loan costs. The two people familiar with the situation said the refinancing will bring down the interest costs by over a quarter.
Primary Health Care is an Australia-based provider of medical services. Based on company information obtained from Bloomberg, Primary Health Care caters to general practitioners, specialists and other healthcare providers, who in turn perform their own practices and businesses at medical institutions like medical centers, eye clinics, licensed day surgeries and specialist clinics. In addition to the abovementioned services, Primary Health Care also gives healthcare software as well as pathology services.
The sources said the refinancing loan will be divided in a three-year tranche at AUD 625 million each, which will have a margin of 155 basis points over the benchmark rate and a debt for five years that will pay 180 basis points more. They spoke on the condition of anonymity because the details are confidential. Data gathered by Bloomberg showed that the Australian firm paid up to 250 basis points on their prior loan.
In a statement, the company said the new loan will enable them to pay back bonds worth AUD 152 million which will expire in September 2015. However, it did not state details about the pricing. Data compiled by Bloomberg revealed that Primary Health Care's 2015 floating-rate bonds returned 400 basis points more than the swap rate of the bank bill.
The new loan facility will be provided by Commonwealth Bank of Australia, Westpac Banking Corp, National Australia Bank Ltd, Bank of Nova Scotia, Sumitomo Mitsui Banking Corp and Mizuho Bank Ltd, the sources told Bloomberg.
Primary Health Care spokeswoman Lauren Thompson declined to give any comment on the loan margins when asked by Bloomberg.
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