Magellan Health entered into a credit agreement with a syndicate of banks providing for a $200 million delayed draw term loan to its wholly-owned subsidiary Magellan Pharmacy Services.

The Bank of Tokyo-Mitsubishi UFJ, Citigroup Global Markets, Compass Bank, JPMorgan Chase Bank, SunTrust Robinson Humphrey and Wells Fargo Securities served as joint lead arrangers and joint bookrunners.

The facility is guaranteed by substantially all of the non-regulated subsidiaries of the company and will mature on December 29, 2017. The proceeds will be used for working capital and general corporate purposes, including the funding of acquisitions.

The annual interest rate on the term loan borrowing is equal to in the case of base rate loans, the sum of an initial borrowing margin of 0.625% plus the higher of the prime rate, one-half of 1% in excess of the overnight “federal funds” rate, or the Eurodollar rate for one month plus 1%, or in the case of Eurodollar rate loans, the sum of an initial borrowing margin of 1.625% plus the Eurodollar rate for the selected interest period. The borrowing margin is subject to adjustment based on the leverage ratio of the company.

The company, through Magellan Pharmacy Services, has the option to borrow in base rate loans or Eurodollar rate loans at its discretion. The commitment commission on the facility is 0.25% of the unused commitment, which rate shall be adjusted from time to time based on the company’s total leverage ratio.