Bank of America, Bank of New York, Bankers Trust, and Morgan Guaranty have won the mandate to lead a $2.5 billion loan for National Medical Enterprises, an acute care hospital chain.

The noninvestment-grade National Medical Enterprises will use the facility to purchase American Medical Holdings. National Medical is currently the second-largest private-investor-owned hospital chain, almost two-thirds smaller than Columbia/HCA.

Approximately $1 billion of the loan will be applied to the $3.3 billion combined cash and stock purchase, and the remainder will be used to refinance debt at both companies.

"This is it," for large acquisitions in the profit hospital community, said Todd Richter, the director of the health care equity research group at Dean Witter Reynolds. The only potentially big private hospital deal that remains to be made would be a purchase by Columbia/HCA of National Medical, but such a merger does not appear imminent.

The dearth of Los Angeles-based deals and the departure of attractive health care paper from the market are expected to add to the syndication's appeal.

Sources said the loan probably would run 6.5 years, and have an initial price of the London interbank offered rate plus 125 basis points, with a 37.5-basis-point commitment fee.

All four lead banks are committing $300 million. Morgan is acting as the administrative agent.

The group is looking for managing agents to commit $200 million, with coagents committing $100 million. The group expects to take the deal to general syndication in early January.

National Medical is on credit watch with negative implications at Standard and Poor's.

While Mr. Richter expects the deal will look attractive to the banking community, he does not think it is a good one for the company, because it will raise the company's debt to 70% of capital.

Mr. Richter changed his rating from "neutral" to "sell."

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