Orpea reworks bank financing for new money loans and revised facility

Chicago, March 21 – Orpea SA reached an agreement on financing with its main banking partners, including additional financing and an adjustment to previous documentation, according to a press release.

Orpea worked with BNP Paribas, Groupe BPCE, Groupe Credit Agricole, Groupe Credit Mutuel Alliance Federale, La Banque Postale and Societe Generale so that the company may implement a restructuring plan pursuant to an accelerated safeguard proceeding.

New money

Orpea’s core banking pool has agreed to provide €600 million in super senior new money financing in three separate facilities.

The first facility has two equal €200 million tranches. Both parts mature June 30, 2026.

Funds are available on the facilities until one month before the maturity date.

The other two facilities are each for €100 million, with a possible reduction in the size based on the disposal of real estate assets.

The maturity dates will be the earlier of Dec. 31, 2023 or five business days after the completion of all share capital increase.

Funds are available from the signing date or after the first facility has been fully drawn to the date one month prior to the respective maturity date.

All of the facilities have an annual 200 basis points margin.

Proceeds will be used to finance or refinance the general corporate purposes of subsidiaries Niort 94 and/or Niort 95. General corporate purposes may include without limitation repayment of intercompany debt, debt service and capital expenditure.

All three facilities have protections for the lenders, including a pledge for shares and voting rights of Niort 94 and Niort 95 through a newly activated special purpose vehicle, a pledge of receivables, an autonomous guarantee pursuant to article 2321 of the French civil code, an equity injection undertaking pursuant to article 2322 of French code civil obligation and Dailly law assignment by way of guarantee by Niort 94 and Niort 95.

Amendments

As part of the financial restructuring Orpea and the lenders agreed to amend the existing facilities agreement from June 13, 2022.

There are three facilities and each have an amended margin of 200 bps.

The first tripart facility has a maturity of Dec. 31, 2027, but the sub-tranches will potentially mature earlier based on repayment installments or in the case of first disposal net proceeds paydowns.

On the first facility, sub-tranche 1, Orpea must make three repayment installments of €200 million each with the second installment possibly including up to an additional €100 million if there are first disposal net proceeds. The installments are due on Oct. 31 in 2024, 2025 and 2026.

For the first facility, sub-tranche 2, a bullet repayment is due at maturity.

For the first facility, sub-tranche 3, there is a first installment repayment of €200 million due on Dec. 31, 2023.

The other two facilities simply mature Dec. 31, 2027 with bullet repayments.

Some of the facility is also subject to mandatory cash flow sweeps each June 30 based on property disposals, provided that the group will maintain €300 million of liquidity until Dec. 31 of each year.

Proceeds of new debt issuances will also be used to repay the credit facilities.

Orpea is a Paris-based long-term care facility operator.

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