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Orthofix enters into $125 million five-year revolving credit facility
By Tali Rackner
Norfolk, Va., Sept. 1 – Orthofix International NV, through subsidiaries Orthofix Holdings, Inc. and Victory Medical Ltd., entered into a $125 million five-year credit agreement on Monday with JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.
The new secured revolving credit facility replaces the company’s prior 2010 facility, which matured on Aug. 30.
The facility is generally available in U.S. dollars, with up to $50 million also available in euros and pounds sterling. It allows for up to $50 million for letters of credit in the agreed currencies.
Orthofix may increase the facility by up to $50 million, which may take the form of one or more increases to the revolving credit commitments and/or the issuance of one or more new term A loans.
Interest is equal to Libor plus 175 basis points to 250 bps, based on the company’s total leverage ratio. The commitment fee ranges from 25 bps to 40 bps, also based on leverage.
The credit agreement contains financial covenants requiring Orthofix, on a consolidated basis, to maintain a maximum total leverage ratio of 3 times and a minimum interest coverage ratio 3 times.
Borrowings may be used for, among other things, working capital and other general corporate purposes.
J.P. Morgan Securities LLC, BBVA Compass and SunTrust Robinson Humphrey, Inc. are joint lead arrangers and bookrunners; BBVA Compass and SunTrust Bank are syndication agents; and Bank of America, NA and Bank of the West are documentation agents.
Orthofix is a Curacao-based medical device company.
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