The securities arms of Bankers Trust New York Corp. and BankAmerica Corp. have assembled financing to fund the buyout of medical equipment maker Kinetic Concepts Inc.

BT Alex. Brown Inc. and BancAmerica Robertson Stephens last Thursday began marketing a $200 million high-yield bond offering for Kinetic, a San Antonio-based company that makes therapeutic beds.

It is owned by private equity firms Fremont Partners LP and Richard C. Blum & Associates. The issue is expected to price the week of Oct. 27.

The securities firms' bank affiliates also led a $530 million multi- tranche facility for the transaction. Bank of America is administrative agent on the loan; Bankers Trust Co. is syndications agent.

In May, Kinetic hired Alex. Brown & Sons to explore its strategic options.

Fremont and Richard C. Blum, both based in San Francisco, separately pursued the purchase.

When the company was put up for auction, the firms submitted a joint bid.

Units of both Bankers Trust and BankAmerica have long-standing relationships with the buyout firms, and Bank of America is an established lender to Kinetic.

The deal underscores the presence of new teams of players in leveraged finance, formed by the spate of marriages between commercial and investment banks this year.

And for this transaction, BT Alex. Brown and BancAmerica Robertson Stephens have chosen a fertile field to harvest.

Health-care issuance has been climbing steadily over the past few years.

It currently represents only about 2.5% of the high-yield market, so investors are hungry for the paper to diversify their portfolios.

"Health-care issues are highly prized by investors," said Gary Goodenough, manager of the New England High-Income Fund. "People are very optimistic about the prospect of the overall health care industry, and since their stocks are performing very well, people feel very comfortable that the dynamics will continue to support the sector in the future."

Some of the more sizable high-yield deals this year have come from the health-care sector, but most have been for service providers. Among them are Tenet Healthcare Corp.'s $2 billion high-yield offering in January, led by Donaldson, Lufkin & Jenrette; and Genesis Eldercare Acquisition Corp.'s $250 million issue in August, led by Morgan Stanley, Dean Witter, Discover & Co.

Edward Mally, director of research at CIBC Wood Gundy Securities, said that as the health-care sector has evolved, the types of companies represented in the high-yield market have changed.

"Six years ago it was dominated by acute-care chains. Now that there's been consolidation there, the sector is much more diversified," Mr. Mally said, adding that these days, issuance is made up of long-term care, rehabilitation, medical testing labs, and home health-care companies.

Kinetic is fairly unusual in that it is a manufacturer of a health-care product, not a health-care provider.

Health-care analyst Premila Peters of KDP Investment Advisors said the biggest long-term risk for the sector is the uncertainty surrounding Medicare and Medicaid, which are the biggest payers to health-care companies.

In the short term, changes in reimbursement add a level of risk, though it will affect each player differently.

Since Kinetic is a manufacturer of beds, not a service provider, the company may be affected indirectly, Ms. Peters said.

Chase Securities Inc. is expected to bring a $500 million offering for Paragon Health Network in the next few weeks.

The leveraged buyout firm Apollo Management LP built Paragon by merging Living Centers of America Inc. and Grancare Inc.

Chase also advised the transaction, and led a $840 million loan for the group.

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