Both loans for the Rochester, New York-based company won’t have financial maintenance requirements, meaning there are no provisions restricting companies from loading up on debt.
Air Medical Group Holdings, a provider of air-ambulance services, will pay interest at a fixed rate of 7.625 percent, or in additional debt at a 75 basis-point premium on a $200 million loan to fund a payout to Bain. Such payment-in-kind, or PIK, payments allow borrowers to repay lenders with more debt. A basis point is 0.01 percentage point.
Emma Thompson, a vice president of investor relations at Onex Corp. in Toronto, didn’t return a telephone call seeking comment. Alex Stanton, a spokesman for Bain at Stanton Public Relations and Marketing, declined to comment. Jessica Bass, a spokeswoman for Beats Electronics, didn’t respond to an e-mail seeking comment.
“Investors are eager for yield and issuers are responding,” Morgan Stanley’s Richmond said. “If rates stay low and volatility stays low, we’ll continue to see more of this activity.”