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R1 RCM enters $1.15 billion five-year credit agreement in two tranches
By Wendy Van Sickle
Columbus, Ohio, July 1 – R1 RCM Inc. entered on Thursday into a five-year amended and restated senior credit agreement with Bank of America, NA as administrative agent that provides for a $700 million term loan and a $450 million revolver, according to an 8-K filed with the Securities and Exchange Commission.
Borrowings bear interest at Libor plus a margin ranging from 125 basis points to 225 bps, and the commitment fee ranges from 20 bps to 40 bps, depending on leverage ratio.
Proceeds will be used to refinance existing debt, to fund the acquisition of iVinci Partners, LLC, also known as VisitPay, for working capital and for general corporate purposes.
The company borrowed $120 million under the revolver at closing.
BofA Securities Inc., JPMorgan Chase Bank, NA, Capital One, NA, Wells Fargo Securities, LLC and Barclays Bank plc are the lead arrangers and bookrunners.
JPMorgan, Capital One, Wells Fargo and Barclays are the co-syndication agents.
U.S. Bank NA, Deutsche Bank Securities Inc. and Morgan Stanley Senior Funding, Inc. are the co-documentation agents.
The company is required to maintain at the end of each fiscal quarter a consolidated total net leverage ratio of not more than 4.50 to 1.00, which ratio will step down in increments to 4.00 to 1.00 commencing with the fiscal quarter ending Sept. 30, 2022 and 3.50 to 1.00 commencing with the fiscal quarter ending Sept. 30, 2023. The company must also maintain at the end of each such fiscal quarter, a consolidated interest coverage ratio of not less than 3.00 to 1.00.
R1 RCM is a Chicago-based provider of revenue cycle management and physician advisory services to health care providers.
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