Rotech Healthcare entered into a new $185 million credit agreement with SunTrust Bank as administrative agent and issuing lender. SunTrust Robinson Humphrey, Regions Bank and Fifth Third Bank acted as joint lead arrangers and bookrunners.
The credit agreement is comprised of a $160 million. five-year term loan and a $25 million revolving credit facility.
The proceeds of this transaction were used to repay the company’s exiting first lien credit agreement that was set to expire in September of this year. At close, Rotech will have in excess of $40 million in cash and undrawn revolver.
In conjunction with this transaction, the company entered into a new five-and-a-half year credit agreement with the lenders in the company’s second lien credit agreement. Under this agreement, the existing second lien credit agreement lenders exchanged the principal and all accrued and unpaid interest outstanding under the existing agreement for a new term loan. All interest on this agreement will be payment-in-kind, with Rotech substantially reducing its annual cash interest payments.
“I am pleased with the completed refinancing and want to thank SunTrust, Regions and Fifth Third for leading this effort,” said Tim Pigg, CEO of Rotech. “These new credit agreements provide Rotech with sufficient capital over the next five years to continue our growth strategies.”
