Lantheus refinances with new $450 million five-year credit facility

By Mary-Katherine Stinson

Lexington, Ky., Dec. 5 – Lantheus Holdings, Inc. subsidiary Lantheus Medical Imaging, Inc. refinanced its existing debt on Dec. 2 with a new $100 million loan facility and a new $350 million five-year revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Lantheus expects to draw from the delayed-draw term loan facility only if its proposed offering of convertible senior notes due 2027, which was announced Dec. 5, is not consummated. If the notes are funded, the delayed-draw facility will be terminated.

The term loan facility includes a commitment fee of 20 basis points annually on the average daily unused amount, which is payable beginning Jan.16, 2023 and ending on the earliest of the day the term loans under the facility are funded, the last day of the delayed-draw availability period and the day the commitments under the term loan facility are reduced to zero

Interest on the revolver is SOFR plus a five-tiered pricing grid that ranges from 150 bps to 250 bps, based on the company’s total net leverage ratio.

Until the first full fiscal quarter ending after closing, the applicable margin will be 175 bps.

The new revolver has a commitment fee that ranges from 15 bps to 35 bps, also depending on leverage.

The company may request an increase to the revolving commitment in an aggregate principal amount of up to $350 million or consolidated EBITDA for the four consecutive fiscal quarters most recently ended plus additional amounts in certain circumstances minus incremental term loans. Lantheus has the right to request incremental term loans in an aggregate principal amount of up to the incremental cap less any incremental increases to the revolver.

The new revolver includes a $20 million sub-facility for the issuance of letters of credit and a $10 million sub-facility for swingline loans.

The new facility contains several affirmative, negative and reporting covenants, as well as a financial maintenance covenant under which the company is required to, among other things, be in quarterly compliance, measured on a trailing four quarter basis, with a total net leverage ratio of 4x through the quarter ending Dec. 31, 2023, and 3.5x onwards. The company must also maintain an interest coverage ratio of not less than 3x for each fiscal quarter.

The letters of credit, swingline loans and the revolving loans are expected to be used for working capital and for other general corporate purposes. Proceeds of incremental term loans may be used for working capital and for other general corporate purposes.

Citizens Bank, NA is the administrative agent and collateral agent.

Citizens Bank, NA, BofA Securities, Inc., Truist Securities, Inc., BMO Capital Markets Corp. and Silicon Valley Bank are the joint lead arrangers and joint bookrunners.

Bank of America, NA and Silicon Valley Bank are the co-syndication agents.

Truist Bank and BMO Harris Bank, NA are the co-documentation agents.

The new credit agreement replaces the company’s existing $200 million five-year term loan and $200 million five-year revolver which was scheduled to mature June 27, 2024. As of Dec. 2, there were no amounts outstanding under the old facility and there were no early termination fees.

The net proceeds of the new term facility, together with about $167.6 million of cash on hand, were used to repay in full the aggregate remaining principal amount of the loans outstanding under the old facility and pay related interest, transaction fees and expenses.

Lantheus Medical is a North Billerica, Mass.-based developer, manufacturer, seller and distributor of diagnostic imaging agents.

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