ResCare enters into amended, restated $650 million credit agreement

By Tali Rackner

Norfolk, Va., May 1 - ResCare, Inc. entered into a $650 million amended and restated credit facility last Friday that amended the company's April 5, 2012 senior secured credit facility and the related term loan A, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement consists of a $200 million term loan A, a $250 million revolving credit facility and a $200 million delayed-draw term loan A, all maturing on April 25, 2019. Subject to lender commitment, the company may increase the principal amount of loans outstanding under the credit facility by up to $175 million.

Borrowings on the term loan A and revolver bear interest at Libor plus 225 basis points. There is a 40 bps unused fee.

The term loan has amortization beginning on Sept. 30 of 5% for years one and two, 7.5% for year three, 10% in year four and 12.5% in the fifth year. The balance is payable at maturity.

The delayed-draw term loan may be drawn within 12 months from the closing date to call the 10¾% senior unsecured notes due 2019 (callable on Jan. 15, 2015) and other uses.

The credit agreement also requires the company to maintain a maximum adjusted consolidated funded debt-to-consolidated EBITDA of not more than 4.25:1.00 initially and decreasing to 3.50:1.00 and a minimum consolidated EBITDA to consolidated interest charges of 2.25:1:00.

Bank of America is the agent, letter-of-credit issuer and swingline lender.

At closing, proceeds of the term loan A and revolving facility were used to refinance the prior revolver and term loan A, to fund a roughly $130 million distribution to shareholders, to pay for related transaction fees and expenses and for working capital and other general corporate purposes.

ResCare is a Louisville, Ky.-based human services company that provides residential and support services, education and job placement services primarily for people with disabilities and youth with special needs.

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