Daily News: December 31, 2013

MidCap Provides ABL, Term Loan to Skilled Healthcare

Skilled Healthcare Group announced that it closed a financing with MidCap Financial consisting of a $62 million, non-recourse (subject to customary carve outs), mortgage-backed term loan and a $5 million asset-based revolving credit facility with an initial balance of $5 million. The loans are secured by 10 skilled nursing facilities and have a term of three years and an interest rate based on LIBOR, which is currently approximately 6.7%.

The net loan proceeds of approximately $65 million have been used to pay down outstanding term debt in the company’s senior-secured credit facility, which has a maturity date of April 2016 and an interest rate based on LIBOR which is currently approximately 6.8%.

“These loans, along with the disposition of two skilled nursing facilities earlier this month, further strengthen our balance sheet and provide additional cushion under our leverage ratio, which is a metric under our senior-secured credit facility comparing earnings to debt that we must maintain below an agreed level,” said Bob Fish, CEO of Skilled Healthcare Group. “We closed $87 million in HUD-insured loans earlier this year, and we continue to believe that the HUD program offers attractive opportunities for longer-term financing at favorable interest rates. We anticipate that these new loans, and the ten skilled nursing facilities securing them, will transition well into HUD-insured loans in the future.”

Foothill Ranch, CA-based Skilled Healthcare Group is a holding company with subsidiary healthcare services companies, which in the aggregate had trailing 12 month revenue of approximately $864 million and approximately 15,000 employees as of September 30, 2013.