Stericycle amends financial covenants in six series of senior notes

By Wendy Van Sickle

Columbus, Ohio, Aug. 19 – Stericycle, Inc. amended its note purchase agreements dated April 30, 2015, Oct. 22, 2012 and Oct. 15, 2010 to, among other things, provide for an increase in the senior notes’ interest rates in the event of specific increases in the company’s consolidated leverage ratio, according to an 8-K filed with the Securities and Exchange Commission.

The affected notes include:

• $200 million of series A notes issued in 2015 and due July 1, 2022;

• $100 million of series B notes issued in 2015 and July 1, 2023;

• $125 million of series A notes issued in 2012 and due Dec. 12, 2019;

• $125 million of series B notes issued in 2012 and due Dec. 12, 2022;

• $175 million of series A notes issued in 2010 and due Oct. 15, 2017; and

• $225 million of series B notes issued in 2010 and due Oct. 15, 2020.

The amendments stipulate the company must maintain a maximum consolidated leverage ratio of 4.35 to 1 at any time from the amendment until either the acquisition of Shred-It International ULC is terminated or the last day of the first fiscal quarter of the company ending on or after the first anniversary date of the consummation of the Shred-It acquisition.

After that the company must maintain a maximum consolidated leverage ratio of 3.75 to 1.

Additionally, the amendments provide for an increase of the interest rates of the notes in the event of certain increases in the consolidated leverage ratio of the company and its subsidiaries, specifically:

• If at any time during the initial one-year period the consolidated leverage ratio of the Stericycle and its subsidiaries exceeds 3.75 to 1 but is at or below 4 to 1, the annual interest rate of each series of the notes will increase by 25 basis points from the date of the leverage increase to the date that the consolidated leverage ratio is 3.75 to 1 or less; and

• If at any time during the initial period the company and its subsidiaries’ consolidated leverage ratio exceeds 4 to 1 but is at or below 4.35 to 1 the annual interest rate of the notes will be increased by an additional 25 bps until the consolidated leverage ratio drops to 4 to 1 or lower.

The notes’ amendments occurred in conjunction with Stericycle’s anticipated acquisition of Shred-it International ULC, Shred-it JV LP, Boost GP Corp. and their subsidiaries.

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