Allscripts refinances facility with $800 million term loan, revolver

By Marisa Wong

Morgantown, W.Va., Oct. 2 – Allscripts Healthcare Solutions, Inc. entered into a replacement facility amendment on Sept. 30 to its credit agreement dated June 28, 2013 with JPMorgan Chase Bank, NA as administrative agent and Fifth Third Bank, KeyBank NA and SunTrust Bank, as syndication agents, according to an 8-K filing with the Securities and Exchange Commission.

The amended credit agreement provides for a $250 million senior secured term loan, which is an increase from the $225 million term loan provided under the existing credit agreement, and a $550 million senior secured revolving facility, an increase from the $425 million revolver provided under the existing agreement.

Each loan has a five-year term. The term loan is repayable in quarterly installments beginning on Dec. 31.

A total of up to $50 million of the revolver is available for the issuance of letters of credit, up to $10 million is available for swingline loans and up to $100 million can be borrowed under foreign currencies.

Proceeds from the amended facility were used to refinance loans under the existing facility.

As of Sept. 30, about $130.1 million was outstanding under the revolver.

The company is also permitted to add one or more incremental revolving and/or term loan facilities in an aggregate amount of up to $300 million, increased from the $250 million incremental facility permitted under the existing credit agreement.

Borrowings under the amended facility bear interest at Libor or Euribor plus an applicable margin, which is initially 225 basis points. Generally, the margin is based on the company’s total leverage ratio and ranges from 100 bps to 225 bps, a decrease from 150 bps to 275 bps previously.

The amended credit agreement has similar prepayment requirements as the existing credit agreement.

The company’s ability to make permitted acquisitions and investments has increased compared to that specified in provisions of the existing agreement. The company is permitted to make acquisitions with a total consideration not exceeding $150 million during any four-fiscal-quarter period or without limit on total consideration when the company’s pro forma senior leverage ratio is less than 3.00 to 1.00, compared to $100 million during the term of the agreement or without limit on total consideration when the pro forma senior leverage ratio is less than 2.75 to 1.00. The company may make other investments not exceeding $75 million in any calendar year or $375 million over the term of the agreement, compared to $75 million during the term of the agreement previously.

In addition, the company’s senior secured credit facilities generally require it to maintain a minimum interest coverage ratio of 4.0 to 1.0, a maximum total leverage ratio of 4.0 to 1.0 and a maximum senior secured leverage ratio of 3.0 to 1.0.

The amended agreement also provides that during the four-quarter period following acquisitions that are permitted by the agreement, financed in whole or in part with debt and the consideration paid by the company at $100 million or more, the company is required to maintain a maximum total leverage ratio and maximum senior secured leverage ratio of 4.5 to 1.0 and 3.25 to 1.0, respectively.

Allscripts is a Chicago-based provider of software, connectivity and information services for physicians.

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