WellCare closes up to $850 million unsecured revolving credit facility

By Tali Rackner

Norfolk, Va., Jan. 12 – WellCare Health Plans, Inc. entered into an up to $850 million senior unsecured revolving credit facility on Friday with administrative agent JPMorgan Chase Bank, NA, according to an 8-K filing with the Securities and Exchange Commission.

Of the $850 million, up to $150 million is available for letters of credit.

The credit agreement also provides for the opportunity to increase the total amount of the revolver and/or obtain incremental term loans in an amount up to $200 million.

Borrowings bear interest at Libor plus 150 basis points to 200 bps, based on the company’s ratio of total debt to cash flow. The unused fee ranges from 25 bps to 35 bps.

Commitments under the facility expire on Jan. 8, 2021 and any revolving credit loans will be payable in full at that time.

At closing, WellCare borrowed $200 million as a revolving loan.

Proceeds may be used for general corporate purposes.

The credit agreement includes financial covenants that include a maximum total net debt to cash flow ratio and a minimum interest expense and principal payment coverage ratio.

Also on Jan. 8, the company terminated its amended and restated senior unsecured credit facility dated Sept. 25, 2014.

Bank of America, NA, MUFG Union Bank, NA, SunTrust Bank and Wells Fargo Bank, NA are co-syndication agents; Goldman Sachs Bank USA and U.S. Bank NA are co-documentation agents; and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Inc., MUFG, SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC are joint bookrunners and lead arrangers.

WellCare is a Tampa, Fla.-based Medicaid managed care provider.

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