Hanger, a provider of orthotic and prosthetic patient care services and solutions, closed a new $605 million senior credit facility consisting of a $100 million five-year revolving credit facility and a $505 million, seven-year term loan B.

According to a related 8-K filing, Bank of America served as the administrative agent for the transaction, while Bank of America Merrill Lynch, Wells Fargo Securities and SunTrust Robinson Humphrey served as lead arrangers, and Region’s Bank acted as co-manager.

Proceeds of the new term loan B were used by Hanger to fully repay all principal outstanding under both its prior senior credit agreement (totaling $152 million) and its $280 million unsecured term loan B credit agreement. In addition, borrowings under the new term loan B were used to pay the call premium on the unsecured term loan B, related transaction fees, accrued and unpaid interest and expenses, and to fund general corporate uses. The new revolver was undrawn at closing. The new term loan B bears interest at a rate of LIBOR plus 350 basis points.

In connection with the credit facility, Hanger plans to enter into a six-year interest rate swap agreement which will effectively fix the interest rate on an initial balance of approximately $325 million of its floating rate debt under the new term loan B. The notional amount of the interest rate swap is planned to ratably decrease to approximately $263 million over the term of the six-year agreement.

The new term loan B simplifies the company’s capital structure and is expected to result in a favorable reduction to the company’s cost of capital by significantly reducing the effective interest rate on its term indebtedness.

Hanger recently received ratings on the credit facility of B1 and B+ from Moody’s and Standard & Poor’s, respectively.