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Laureate drops leverage to 4.7x from over 6x in one year, refis debt
By Devika Patel
Knoxville, Tenn., Oct. 3 – Laureate Education Inc. took its leverage metrics down to 4.7x by year-end 2016 from a high of over 6x at year-end 2015.
The company will continue deleveraging until it reaches its target level of 3x or below.
Laureate also refinanced some debt in April, pushing its upcoming maturities out to 2022, 2024 and 2025.
“At the end of 2015, our leverage ratio was over 6x, which was significantly above where we wanted to be,” president and chief financial officer Eilif Serck-Hanssen said at Deutsche Bank’s 25th Annual Leveraged Finance Conference in Scottsdale, Ariz., on Tuesday.
“We were very focused to get that leverage level down and, just through the organic performance and certain asset sales that we did during 2016, we got our leverage to be 4.7x on a reported basis by year-end,” he said.
The company was able to reduce its leverage and will continue to focus on deleveraging until it reaches its target level of 3x or below.
“But we also raised $400 million in a convertible that enabled us to then take the company public in early February of 2017 and when you pro forma for the proceeds from the conversion of the convert and the IPO, our year-end 2016 leverage level is 3.8x,” Serck-Hanssen said.
“We’re very focused on continuing deleveraging the company.
“We want to see the leverage at 3x or below going forward so for the next couple of years we’re going to really focus on executing on our organic plans,” Serck-Hanssen said.
The company also refinanced its bonds and term loan.
“Following the IPO [in April 2017], we were able to refinance both the term loan and the bonds,” Serck-Hanssen said.
“Post refinancing, we pushed all of the maturities out to 2024, 2025, with the revolver due in 2022,” he said.
Laureate is a Baltimore-based network of degree-granting higher education institutions.
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