NeoGenomics adds details to revolver, term loan totaling $150 million

By Tali Rackner

Norfolk, Va., Dec. 28 – NeoGenomics, Inc. give details of its new $150 million five-year senior secured credit facility with Regions Bank as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The facility consists of a $75 million revolving loan and a $75 million term loan. The revolver includes a $10 million sublimit for swingline loans.

There is a $50 million expansion option.

Initial interest on both facilities is equal to Libor plus 300 basis points. The spread over Libor ranges from 225 bps to 350 bps, based on NeoGeonomics’ consolidated leverage ratio.

The commitment fee on the unused portion of the revolver is initially 37.5 bps. The fee ranges from 25 bps to 50 bps, also depending on leverage.

Principal payments on the term loan will be due on the last day of each fiscal quarter beginning March 31, 2017, with quarterly principal payments of about $940,000 in 2017, $1.41 million in 2018 and 2019 and roughly $1.88 million in 2020. The remainder is due at maturity.

The company is required to comply with a maximum consolidated leverage ratio of 3.75 times from March 31, 2017 through Dec. 31, 2017, 3.5 times from March 31, 2018 through Dec. 31, 2019 and 3 times thereafter. It is also required to maintain a minimum consolidated fixed charge coverage ratio as of the end of each fiscal quarter of 1.25 times.

Both facilities mature on Dec. 21, 2021.

The borrower is subsidiary NeoGenomics Laboratories, Inc.

As previously reported, the company borrowed $97.9 million at closing, including $75 million of term debt and $22.9 million under the revolver.

Proceeds, combined with about $16 million of cash, were used to retire the existing $54.6 million term loan and redeem 8,066,667 shares of series A redeemable preferred stock held by an affiliate of General Electric Co. for $55 million.

The facility was jointly led by Regions Capital Markets, Merrill Lynch, Pierce, Fenner & Smith, Inc. and Wells Fargo Securities, LLC. Bank of America, NA and Wells Fargo Bank, NA served as co-syndication agents. Hancock Bank, Huntington National Bank and PNC Bank, NA served as co-documentation agents.

The new facility replaces the $54.6 million term loan and an undrawn $25 million asset-based revolver previously in place.

Based in Fort Myers, Fla., NeoGenomics is a cancer genetics diagnostics testing company.

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