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July 27, 2001 at 08:00 PM
NU Online News Service, July 27, 12:25 p.m. – PacifiCare Health Systems Inc., Santa Ana, Calif., says it is canceling previously announced plans to refinance $100 million in senior notes due in 2003 because of difficulties with replacing a revolving bank credit facility and selling new notes “in light of market conditions.”
But the managed care company emphasizes that it had an average of $130 million in free, unencumbered cash during the second quarter; expects to report earnings of 45 cents per share for the quarter; and remains in compliance with all existing bank covenants.
PacifiCare set up a five-year, unsecured, variable-rate credit facility in October 1996 to finance the acquisition of FHP International Corp., a Fountain Valley, Calif., managed care company. Bank of America Corp., Charlotte, N.C., organized the syndicate.
The credit facility started out with a credit limit of $1.5 billion. The limit dropped to $800 million July 1 and is scheduled to drop to zero Jan. 1, 2002.
PacifiCare had a credit facility balance of $735 million March 31 and an overall interest rate of about 7.9%, according to a quarterly report the company filed with the U.S. Securities and Exchange Commission.
