Gentiva amends loan to modify leverage covenant and EBITDA definition

By Sara Rosenberg

New York, Nov. 29 - Gentiva Health Services Inc. amended its credit facility, revising the leverage ratio and the definition of consolidated EBITDA, according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

Under the new leverage ratio, the company must meet a requirement of 4.75 to 1.00 for the fourth fiscal quarter of 2011, compared to the originally required ratio of 4.50 to 1.00.

And, the consolidated EBITDA definition was changed to add-back the full costs associated with Gentiva's cost realignment and operating losses associated with branches scheduled to be closed or sold during the fourth quarter of 2011.

As a condition of the amendment, the Atlanta-based home health care provider has to repay $20 million of its term loans, to be applied ratably between the term loan A and the term loan B.

Also, lenders were given a 25 basis point consent fee.

The amendment was completed on Nov. 28.

Bank of America is the administrative agent on the deal.

Gentiva said in a press release that the amendment "represents the first part of a two-part strategy which is intended to provide flexibility through the next few years as the company works with its lenders to reset its financial covenants to reflect a more difficult reimbursement environment."

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