RTI gets commitments for $80 million loans to fund Pioneer merger

By Marisa Wong

Madison, Wis., June 13 - RTI Biologics, Inc. executed a commitment letter providing for an $80 million five-year senior secured facility that includes a $60 million term loan and a $20 million revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The commitment letter is dated June 7 with TD Bank, NA as administrative agent, TD Securities USA LLC as bookrunner and joint lead arranger and Regions Bank as joint lead arranger.

Borrowings will be used to help fund the company's acquisition of Pioneer Surgical Technology, Inc.

Interest is equal to Libor plus 100 basis points to 175 bps, depending on the company's senior debt to EBITDA ratio.

The revolver has an unused fee of 15 bps to 30 bps, also based on the senior debt to EBITDA ratio.

After an interest only period from Sept. 30 to Dec. 31, 2014, principal on the term loan will be reduced as follows: $1.5 million in the quarters ending March 31, 2015 and June 30, 2015, $1,125,000 in the quarters Sept. 30, 2015 through June 30, 2017 and $1.5 million in the quarters from Sept. 30, 2017 through maturity.

Financial covenants include a minimum fixed charge coverage ratio of 1.25 times, a maximum senior debt to EBITDA ratio of 2.75 times through Dec. 31, 2014 and 2.5 times after that and minimum liquidity of $10 million.

Based in Alachua, Fla., RTI Biologics prepares human donated tissue and bovine tissue for transplantation.

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