Sotera Health, a global provider of mission-critical end-to-end sterilization solutions and lab testing and advisory services for the healthcare industry, closed on a senior secured Term Loan B facility in an aggregate principal amount of $500 million. The company had previously announced its intention to enter into a new senior secured term loan B facility in an aggregate principal amount of $425 million. The company plans to use proceeds of this debt financing, along with cash on hand, to: fund a previously announced $408 million ethylene oxide litigation settlement in Cook County, IL, subject to the satisfaction or waiver by the company of the various conditions for the settlement, pay down existing borrowings under the company’s revolving credit facility, further enhance liquidity and for other general corporate purposes.
According to an 8K filed with the SEC, JPMorgan Chase is the administrative agent for the facility.
“We are pleased to announce the successful completion of our $500 million term loan B debt financing at terms that are favorable to the company,” Michael B. Petras, Jr., chairman and CEO of Sotera, said. “The strong market reception for this financing is a testament to the solid profile of our business. This funding will be used to cover our litigation needs, as well as provide additional liquidity for the company.”
The term loan B will bear interest at a variable rate per annum, at the company’s option, of either one-, three- or six-month SOFR plus 375 basis points (subject to a 50bps floor), or a base rate plus 275 basis points, in any case payable in arrears. It is prepayable without premium or penalty at any time six months after the closing date, and includes a 1.00% premium for certain repricing transactions that occur in the first six months after the closing date. The loan is required to be paid down at 1% of the aggregate principal amount ($5 million) per year, with the balance due at the end of 2026. The term loan B covenants are substantially the same as those the company’s existing credit agreement.
