ResMed obtains $300 million term loan, expands revolver to $1 billion

By Wendy Van Sickle

Columbus, Ohio, April 4 – ResMed Inc. entered into a one-year $300 million senior unsecured term loan credit facility on Monday and amended its existing revolving credit facility, expanding its capacity to $1 billion from $700 million, according to an 8-K filing with the Securities and Exchange Commission.

The new term loan and revolver amendment were entered in connection with the closing of ResMed’s acquisition of Brightree LLC, and the term loan and some revolver proceeds were used to pay a portion of the $800 million consideration as well as related expenses.

The term loan borrowings initially bear interest at Libor plus 150 basis points, and interest can range from Libor plus 100 bps to Libor plus 200 bps, depending on the leverage ratio.

The facility matures April 3, 2017.

ResMed must comply with a maximum ratio of funded debt to EBITDA and an interest coverage ratio.

The amended revolving credit agreement, originally dated Oct. 31, 2013 with MUFG as administrative agent, also provides for an uncommitted option to increase the facility by an additional $300 million.

The revolver bears interest at Libor plus 150 bps. The applicable margin can range from 100 bps to 200 bps, depending on leverage. The commitment fee ranges from 15 bps to 25 bps and is presently 20 bps.

MUFG is also a joint lead arranger of the revolver, along with HSBC, which is also the syndication agent.

ResMed’s obligations under both credit agreements are guaranteed by some of ResMed’s direct and indirect United States subsidiaries, including ResMed Corp., ResMed Motor Technologies Inc., Birdie Inc. and Inova Labs, Inc., under an unconditional guaranty.

Brightree, Brightree Services LLC, Brightree Home Health & Hospice LLC and Strategic AR LLC are to be added as guarantors within 30 days.

ResMed is a San Diego-based medical device company focused on the diagnosis, treatment and management of sleep-disordered breathing, COPD and other chronic conditions. Brightree is an Atlanta-based provider of cloud-based software to improve clinical and business performance in the post-acute care industry.

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