On Assignment amends $500 million credit facility via Wells Fargo

By Toni Weeks

San Luis Obispo, Calif., May 16 - On Assignment, Inc. entered into an amended and restated credit agreement with Wells Fargo Bank, NA as administrative agent, swingline lender and a letter-of-credit issuer, according to an 8-K filing with the Securities and Exchange Commission.

The agreement provides for a $100 million five-year term A loan facility, a $275 million seven-year term B loan facility and a $125 million five-year revolving loan facility, which includes $10 million swingline and $10 million letters-of-credit subfacilities. The agreement also allows the company to increase the loan facilities for up to the greater of $100 million and the amount that is equal to the greatest amount of additional debt that would not cause the company to exceed specified conditions.

Borrowings bear interest at Libor plus 175 basis points to 250 bps for the revolver and term A loan and Libor plus 250 bps for the term B loan. The exact margins are based on the company's leverage ratio.

On assignment will also pay a commitment fee on the undrawn portion of the revolver of 40 bps if the leverage ratio is greater than or equal to 3.00 to 1.00, 35 bps if the leverage ratio is less than 3.00 to 1.00 but greater than or equal to 2.50 to 1.00, 30 bps if the leverage ratio is less than 2.50 to 1.00 but greater than or equal to 2.00 to 1.00 and 25 bps if the leverage ratio is less than 2.00 to 1.00. The company will also pay variable fees equal to the applicable margin in respect of outstanding letters of credit.

The agreement also requires the company to maintain a maximum ratio of consolidated funded debt to consolidated EBITDA of 4.25 to 1.00 to 3.25 to 1.00. For the six-month period ending Dec. 30, 2013, the company is required to maintain a leverage ratio of not more than 4.25 to 1.00.

The company's obligations under the agreement are guaranteed by substantially all of its direct and indirect domestic subsidiaries.

Bank of America, NA is the syndication agent. BMO Harris Financing Inc., Capital One, NA, Fifth Third Bank, Royal Bank of Canada and Union Bank, NA are co-documentation agents. Wells Fargo Securities, LLC, Bank of America Merrill Lynch, BMO Capital Markets Corp., Capital One, NA, Fifth Third, RBC Capital Markets and Union Bank are the joint lead arrangers, with Wells Fargo and BofA Merrill Lynch as joint bookrunners.

Based in Calabasas, Calif., On Assignment is a provider of professionals in the technology, health-care and life-sciences sectors.

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