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HealthSouth extends revolver, gets $150 million term loan commitment
By Angela McDaniels
Tacoma, Wash., Sept. 24 – HealthSouth Corp. amended the credit agreement governing its $600 million senior secured revolving credit facility on Monday to extend the agreement’s maturity to Sept. 20, 2019 and add a $150 million term loan commitment, according to an 8-K filing with the Securities and Exchange Commission.
The term loan may be drawn any time on or before March 31, 2015.
The initial interest rate for the term loan is the same as the revolver, Libor plus 175 basis points.
Amounts drawn under the term loan facility will be payable in equal quarterly installments of 1.25%.
Amounts drawn under the term loan facility will not reduce the credit agreement’s $300 million accordion feature.
The company intends to draw $75 million of the term loan and apply it toward the redemption of its $271 million of 7¼% senior notes due 2018 on Oct. 1. Cash on hand and the proceeds of the recent $175 million reopening of the company’s 5¾% senior notes due 2024 will also be used to fund the redemption.
The amendment also made changes to
• Eliminate the requirement to mortgage any real property to secure the credit agreement;
• Increase the maximum senior secured leverage ratio to 1.75 times from 1.5 times; and
• Increase the amount of permitted capital expenditures in a given year from $250 million to $300 million, which amount is in addition to any unused portion of the permitted amount from the prior year.
Barclays Bank plc is the administrative agent and collateral agent. Citigroup Global Markets Inc. is the syndication agent. Bank of America, NA, Goldman Sachs Lending Partners LLC and Morgan Stanley Senior Funding, Inc. are the co-documentation agents.
HealthSouth is a Birmingham, Ala.-based owner and operator of inpatient rehabilitation hospitals.
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