Daily News: June 7, 2013

HFG Provides KidsPeace $18MM DIP Facility

Healthcare Finance Group (HFG) provided $18 million in debtor-in-possession financing to KidsPeace Corporation.

The DIP facility proceeds will be used to refinance KidsPeace’s existing working capital facility and to provide financing for post-petition working capital needs, administrative costs related to the bankruptcy, and other general corporate purposes. The DIP facility consists of a $13 million revolving line of credit facility and a $5 million delayed-draw term loan.

KidsPeace provides pediatric behavioral health services with residential treatment facilities in Pennsylvania, Minnesota, Maine and Georgia. The company also operates a pediatric psychiatric hospital in Pennsylvania and has foster care and community care programs in eight states and the District of Columbia.

KidsPeace announced that it filed a voluntary petition for reorganization under Chapter 11 on May 21, 2013 with the purpose of reducing and restructuring its obligations in connection with its outstanding revenue bonds and its defined benefit pension plan. Prior to its filing, the company entered a Plan Support Agreement and a term sheet for a Plan of Reorganization with a majority of the bondholders and a termination agreement with the Pension Benefit Guarantee Corporation.

James Horan, EVP and CFO of KidsPeace, commented, “We were impressed with HFG’s persistence in working with us over many months and through several phases of our planning, and with their ability and willingness to be creative in finding a solution for our needs. We are pleased to have found a financing partner that will be able to aid our restructuring as we enter this new chapter in our history.”

Claudia Gourdon, senior vice president and national marketing manager of HFG, said, “KidsPeace provides unique and vital community services, and HFG is very glad to be able to provide it with the financing it needs as it re-establishes its financial health. With its solid and dedicated staff and excellent clinical reputation, KidsPeace has all the fundamental ingredients to successfully emerge from bankruptcy, and we look forward to being its financial partner for years to come.”