StoneMor enters into up to $210 million revolving credit facility

By Tali Rackner

Norfolk, Va., Aug. 5 – StoneMor Operating LLC, a wholly owned subsidiary of StoneMor Partners LP, entered into a credit agreement with Capital One, NA as administrative agent and swingline lender, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement, which closed on Thursday, provides for up to $210 million of revolving commitments, which may be increased by up to $100 million.

StoneMor may also request up to $15 million of letters of credit.

The facility matures on the earlier of Aug. 4, 2021 and six months prior to the earliest scheduled maturity date of any outstanding permitted unsecured debt. Currently, that date is Dec. 1, 2020, which is six months before the June 1, 2021 maturity date of outstanding 7 7/8% senior notes.

Initial interest is Libor plus 275 basis points. The spread ranges from Libor plus 175 bps to 325 bps, based on the company’s consolidated leverage ratio. There is also a quarterly unused commitment fee.

Certain financial covenants require StoneMor to maintain a minimum consolidated leverage ratio of 4 times, which may be increased to 4.25 times in case of a designated acquisition. The company must also maintain a maximum consolidated debt service coverage ratio of 2.5 times.

The new agreement replaces the partnership’s $180 million fourth amended and restated credit agreement, as amended with Bank of America, NA as administrative agent, swingline lender and letter-of-credit issuer.

At closing, there was $126.1 million of borrowings outstanding under the facility. Proceeds were used to repay outstanding debt under the prior credit agreement.

Citizens Bank of Pennsylvania, is the syndication agent on the deal, and TD Bank, NA and Raymond James Bank, NA are co-documentation agents.

StoneMor is a Levittown, Pa.-based cemetery and funeral services provider.

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