On the sidelines for most of the decade, HPSC Inc. was shopping a medical equipment-backed deal last week in the Rule 144A market, via lead/sole manager Credit Suisse First Boston.
The deal is set to price and close early this week.
The $530 million transaction is backed mostly by dental equipment, according to a source familiar with the deal. The deal is structured in five two-year tranches, with ratings ranging from triple-A to double-B. Talk on the $415 million, floating-rate A class was one-month Libor plus 20 area, while the talk on the $8.9 million E class was Treasurys plus 400, according to reports.
Sources said that HPSC considered the public market but found the price differential not significant enough to counter the cost of a public deal.
Funding in the commercial paper market for most of the 1990's, HPSC last tapped the asset-backed market in 1993, according to Thomson Financial Securities Data. The company placed its deal as a traditional private worth approximately $70 million. The deal was wrapped by MBIA and managed by Continental Bank, which has since been absorbed by Bank of America.
HPSC owns American Commercial Finance Corporation, which extends lines of credit to manufacturing and distribution companies.