Genesis HealthCare closed a new $555 million ABL facility with MidCap Financial and expanded its term loan with Welltower and Omega Healthcare Investors.
The new $555 million ABL facility extends the maturity of the to-be-replaced facility by three years through 2023, ensuring long-term access to working capital financing.
The company’s existing $124 million term loan will expand by $40 million.
The new ABL and term loan expansion provide $70 million of increased liquidity over prior levels.
“I could not be more pleased with the progress on our financing and restructuring plans over the past three months,” said George V. Hager, Genesis CEO. “The commitments we have received from new and existing credit partners signal strength and confidence in Genesis’ business plan and positions the company for sustainable, long-term success. We look forward to providing updates as significant additional milestones are achieved.”
The new ABL facilities provided by MidCap Financial Trust will have a five-year term and proceeds will be used to replace and repay in full the company’s existing $525 million revolving credit facilities that are scheduled to mature on February 2, 2020.
Borrowings under the term loan and revolving credit facility components of the new ABL will bear interest at a 90-day LIBOR rate (subject to a floor of 0.5%) plus an applicable margin of 6%. Borrowings under the overline component will bear interest at a 90-day LIBOR rate (subject to a floor of 1%) plus an applicable margin of 11%. Borrowing levels under the term loan and revolving credit facility components of the New ABL are limited to a borrowing base that is computed based upon the level of eligible accounts receivable.
Welltower and Omega Healthcare Investors amended the company’s existing $124 million term loan agreement. The amendment calls for a new $40 million term loan tranche, changes to interest obligations and the elimination of any principal amortization prior to maturity. Proceeds from the new $40 million tranche will be used for general corporate purposes.
The new financing is part of Genesis’s previously announced restructuring plan.
Kennett Square, PA-based Genesis HealthCare is a holding company with subsidiaries that, on a combined basis, comprise one of the nation’s largest post-acute care providers with more than 450 skilled nursing facilities and assisted/senior living communities in 30 states nationwide.
