Daily News: August 3, 2016

Wilmington Trust, BofA Agent Hanger’s Debt Restructuring


Hanger entered into a new credit agreement for a $280 million senior loan and entered into a fifth amendment and waiver to modify and extend waivers under its 2013 credit agreement. Austin, TX-based Hanger is a provider of orthotic and prosthetic services and products.

Under its new credit agreement with Wilmington Trust as administrative agent, all outstanding principal is due at maturity on August 1, 2019. The loan bears interest at a fixed rate per annum equal to 11.50% payable quarterly in arrears. Hanger is required to use the proceeds of the loan to redeem all of its outstanding notes. As of August 1, 2016, $203.6 million aggregate principal amount of notes was outstanding. The redemption is expected to occur on August 31, 2016.

Hanger also modified its credit agreement with Bank of America in its capacity as agent dated June 17, 2013. The agreement was previously amended on June 19, 2015, September 11, 2015, November 13, 2015 and on February 10, 2016. The company’s fifth amendment and waiver to the agreement waives the events of default under the credit agreement arising from Hanger’s failure to deliver prior financial to the agent, and the company’s failure to comply with the leverage ratio for the fiscal quarter ended March 31, 2016. According to the new amendment and waiver, Hanger’s failure to deliver the required financial information on or before August 15, 2017 will be an additional event of default.

The amendment and waiver also permanently reduced the aggregate revolving commitment under the credit agreement from $200 million to $135.3 million. According to an 8-K filing, if Hanger receives certain federal income tax funds in respect of tax year 2015 or earlier, 50% of its net cash proceeds from its refunds will be applied as a further permanent reduction of the aggregate revolving commitment. However, the commitment will in no event be reduced to less than $108 million.

In a statement from Hanger, Vinit K. Asar, the company’s president and CEO, said, “While we continue to assess the time needed to prepare and file our financial statements in light of the extensive review we have undertaken, we remain focused and committed to working as quickly as possible. Currently, we do not expect to commence filing before December of 2016. As we have throughout our accounting remediation, we will continue to deliver superior patient care and unsurpassed customer service. This has been — and remains — the soul of our business.”