Daily News: June 27, 2014

JPMorgan Agents $5.5B DaVita Credit Agreement


On June 24, 2014, DaVita HealthCare Partners entered into a $5.5 billion senior secured credit agreement. JPMorgan Chase Bank acted as administrative agent and collateral agent, according to an 8-K filed June 26, 2014. Barclays Bank and Wells Fargo Bank acted as co-syndication agents, Bank of America, Credit Suisse AG, Goldman Sachs Bank, J.P. Morgan Chase Bank, and Morgan Stanley Senior Funding and Suntrust Bank served as co-documentation agents.

The senior secured credit agreement provides for a $1 billion senior secured revolving credit facility maturing in June 2019, a $1 billion senior secured term loan A repayable in quarterly installments commencing in September 2014 with a final maturity in June 2019, and a $3.5 billion senior secured term loan B facility repayable in quarterly installments commencing in September 2014 with a final maturity in June 2021.

Loans made under the revolving facility and the term facilities will bear interest at a rate based on a London Interbank Offered Rate (LIBOR) rate (which will, with respect to the term loan B facility, be subject to a floor of 0.75%) or the Prime Rate, in each case plus a margin. For the revolving credit facility and the term loan A the margin is 1.75% over LIBOR and 0.75% over the Prime Rate, as the case may be. For the term loan B the margin is 2.75% over LIBOR and 1.75% over the Prime Rate, as the case may be. The margin for the revolving credit facility and the term loan A is subject to leverage-based adjustments.

The senior secured credit agreement contains financial and operating covenants. The financial covenant is a maximum leverage ratio. Operating covenants include limitations on the company’s ability to incur additional indebtedness, grant liens on assets, make significant asset dispositions and investments and pay dividends.

All obligations under the senior secured credit agreement are, subject to certain exceptions, guaranteed by certain of the company’s domestic subsidiaries and secured by substantially all of the tangible and intangible assets of the company and such guarantors.

The company and its affiliates may from time to time engage certain of the lenders under the senior secured credit facility to provide other banking and financial services.

In connection with entering into the new senior secured credit agreement, on June 24, 2014, the company terminated its existing credit agreement, dated as of October 20, 2010 among the company, the guarantors party thereto, and the lenders party thereto and related agreements and documents.