Meadowbrook obtains $30 million term loan, $100 million revolver

By Marisa Wong

Madison, Wis., Aug. 30 - Meadowbrook Insurance Group, Inc. entered into a credit agreement with JPMorgan Chase Bank, NA as the administrative agent on Wednesday, according to an 8-K filed Thursday with the Securities and Exchange Commission.

J.P. Morgan Securities, LLC is the bookrunner and lead arranger, and Bank of America, NA and KeyBank, NA are the syndication agents.

The agreement provides Meadowbrook with a $130 million four-year credit facility, which includes a $30 million term loan and a $100 million revolving line of credit.

The term loan may be increased by up to an additional $25 million and is subject to quarterly amortization.

Interest is equal to Libor plus an applicable margin of 50 basis points to 100 bps, depending on Meadowbrook's consolidated leverage ratio.

There is a commitment fee ranging from 20 bps to 30 bps, also based on the company's consolidated leverage ratio, a letter-of-credit participation fee equal to the applicable margin and a letter-of-credit fronting fee of 12.5 bps.

Under the credit agreement, Meadowbrook is required to maintain the following financial covenants:

• Minimum consolidated net worth starting at $473,942,000;

• A risk-based capital ratio of material insurance subsidiaries of 1.75 to 1.00;

• A maximum permitted consolidated leverage ratio of 0.35 to 1.00;

• A minimum consolidated fixed charge coverage ratio of 1.25 to 1.00; and

• A minimum financial strength rating by A.M. Best of B++.

Subject to certain exceptions, outstanding borrowings must be prepaid with net proceeds from certain divestitures, equity issuances or new debt. The term loan and revolver may be repaid or reduced in whole or in part without premium or penalty.

Meadowbrook is a Southfield, Mich.-based risk management services company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.