Barclays NYSE:BCS has withdrawn a nearly $1 billion leveraged loan for Sound Inpatient Physicians from the debt capital markets, creating one of the few pulled US leveraged loan deals this year. The hospital staffing company's $960 million term loan reportedly failed to attract enough investor demand before the June 30 deadline, even after offering a margin of 5 percentage points above the benchmark.
Barclays is expected to revise some financing terms and possibly relaunch the loan in the syndicated market later, according to people familiar with the matter. The proceeds were intended to refinance Sound Inpatient Physicians' existing debt after a 2024 private-lender deal, while the proposed structure included lender protections such as limits on early repayment, 2.5% annual repayment during the first two years, and 5% annually after that.
The failed syndication could be important for credit investors because it comes against a broader market backdrop where demand for riskier US corporate loans has otherwise remained strong. S&P Global Ratings assigned the proposed debt a B- junk rating, while Moody's upgraded Sound Inpatient Physicians to B3 from Caa1, citing expectations that the new loan would simplify the company's capital structure and extend its debt maturity profile.