Regions Bank served as administrative agent and collateral agent on the refinancing of CPSI’s existing credit facilities through an amended and restated credit agreement.
The amended agreement:
- Increases the maximum borrowing capacity under the revolving credit facility from $50 million to $110 million, with undrawn amounts available for future borrowings increasing from $34 million to $81 million
- Decreases the amount outstanding under the term loan facility from $87 million to $75 million, with an accompanying reduction in term loan payments designed to achieve a nearly $6 million decrease in term loan payment commitments over the next 12 months
- Allows for more advantageous pricing at certain leverage ratios
- Removes previous absolute-dollar limits on acquisition activity (previously limited to $20 million in any annual period and $50 million over the life of the credit facilities)
- Leaves relatively unchanged the maximum consolidated leverage ratio, now calculated on a net basis (at 3.5 times consolidated EBITDA) and the minimum consolidated fixed charge coverage ratio (at 1.25 times consolidated fixed charges)
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“We entered 2020 with an eye towards amending our credit agreement to create greater flexibility for more diversified and opportunistic uses of capital in the future,” Matt Chambless, CFO of CPSI, said. “Though the onset of the COVID-19 pandemic has created unprecedented challenges for CPSI and the capital markets, the strength of our operations, balance sheet and cash flows has allowed us to continue this refinance effort unimpeded, despite the current macro environment. With the solid support of our lending partners, we have successfully executed on our refinancing goals set forth at the beginning of the year.”
The amended agreement provides CPSI with liquidity to broaden its capital allocation strategy. CPSI now has the flexibility to act on strategic tuck-in M&A opportunities, invest in new and existing products and services, and potentially pursue value-driven share repurchases.
CPSI is a provider of healthcare solutions and services for community hospitals, their clinics and post-acute care facilities.
