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Heritage Insurance gets $125 million five-year term loan, revolver
By Susanna Moon
Chicago, Dec. 17 – Heritage Insurance Holdings Inc. obtained a $75 million senior secured term loan facility and a $50 million senior secured revolving credit facility.
The company entered into a $125 million five-year credit agreement last Friday with Regions Capital Markets and BMO Capital Markets Corp., as joint lead arrangers and joint bookrunners and Regions Bank as administrative agent and collateral agent, according to an 8-K filing with the Securities and Exchange Commission.
The revolver includes a $5 million sublimit for the issuance of letters of credit and a $10 million sublimit for swingline loans.
Interest on the loans ranges from Libor plus 325 basis points to 375 bps based on leverage.
Proceeds will be used to redeem the company’s $79.5 million principal amount of senior notes due 2023, to purchase its 5.875% convertible notes due 2037 and for general corporate purposes.
BMO Harris Bank NA is the syndication agent. Hancock Whitney Bank and Canadian Imperial Bank of Commerce are the do-documentation agents.
The credit facilities will mature on Dec. 14, 2023.
The principal amount of the term loan amortizes in quarterly installments of $1,875,000 beginning with the close of the fiscal quarter ending March 31, 2019 and the balance payable at maturity.
The company may prepay the loans under the facilities at any time without premium or penalty.
The credit agreement requires the company to maintain a maximum consolidated leverage ratio of 3.25 times for each fiscal quarter ending on or before Dec. 31, 2019, stepping down on each of the three anniversaries after that; a minimum consolidated fixed charge coverage ratio of 1.2 times and a minimum consolidated net worth for the company and its subsidiaries.
On Dec. 13, the company received an advance of $19.2 million with interest at a rate of 3.094% per year due Dec. 13, 2023.
Heritage Insurance is a Clearwater, Fla.-based reinsurance company.
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