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Sierra Sets Up $65 Million Credit Facility

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NU Online News Service, Feb. 25, 8:59 a.m. – Sierra Health Services Inc., Las Vegas, says it is setting up a new $65 million revolving credit facility and preparing to borrow more than $100 million in additional capital by issuing unsecured bonds.

Sierra, a large managed care company, has hired a unit of Bank of America Corp., Charlotte, N.C., to arrange the new credit facility, which will replace an existing facility that is set to expire Sept. 30.

A revolving credit facility is the corporate version of a credit card account.

The new facility will expire in 2006, and the initial interest rate will be 2.25 percentage points over the London Interbank Offered Rate, Sierra says.

Sierra says bonds issued through the bond offering will mature in 2023.

Sierra could increase the total amount of cash raised to $115 million if the offering goes well.

Sierra wants to use the first $34 million raised to pay off its existing credit facility.

The company intends to give $35 million to a unit that administers health coverage for military families and spend another $20 million to buy some of its 29.5 million shares of outstanding common stock..