Apollo Medical Holdings refinanced its existing term loan and revolving credit facility with a new five-year revolving credit facility of $400 million, including a letter of credit sub-facility of up to $25 million and a swingline loan sub-facility of $25 million.
Truist Bank served as administrative agent for the new facility. Truist Securities led an arranger group that also included JPMorgan Chase, MUFG Union Bank, Preferred Bank, Royal Bank of Canada and Fifth Third Bank. Wells Fargo, Bank of the West, City National Bank and TD Bank were also lenders in the transaction.
Apollo Medical Holdings used available cash of $58.7 million and a portion of the new revolving credit facility to pay off its existing and remaining $175.8 million term loan and $60 million drawn on its prior revolving credit facility maturing in September 2024. The company also will use the new revolving credit facility to finance future acquisitions and investments and provide for working capital needs and other general corporate purposes. Any amounts borrowed under the revolving credit facility will bear interest at a rate of LIBOR plus 1.25% to 2.5% or a base rate plus 0.25% to 1.5% (determined on a quarterly basis based on the company’s leverage ratio).
“We are pleased to have completed this debt refinancing as we take proactive steps to enhance our ability to invest in growth while reducing our annual interest rate spread by 50 basis points on the initial $180.0 million drawdown and increasing our overall financial flexibility with respect to covenants and liquidity,” Kenneth Sim, MD, executive chairman and co-CEO of Apollo Medical Holdings, said, This refinancing puts ApolloMed in a more advantageous position as we look to accelerate the growth of our business in 2021 and drive increasing value to shareholders.”