WellCare obtains amended and restated $1.3 billion revolver due 2023

By Sarah Lizee

Olympia, Wash., July 24 – WellCare Health Plans, Inc. entered into an amended and restated credit agreement on Monday with JPMorgan Chase Bank, NA as administrative agent to increase the total commitments under the revolving credit facility to $1.3 billion from $1 billion and extend the maturity date to July 2023 from January 2021, according to an 8-K filing with the Securities and Exchange Commission.

Interest for borrowings under the revolver was decreased to Libor plus a margin ranging from 137.5 basis points to 200 bps, and the commitment fee ranges from 20 bps to 30 bps, both depending on the company’s ratio of total debt to consolidated EBITDA. Initially, interest is Libor plus 150 bps and the commitment fee is 22.5 bps.

There is an accordion feature allowing for an increase of total commitments under the revolver by up to an additional $500 million.

Proceeds may be used for general corporate purposes of the company and its subsidiaries, including the pending acquisition of Meridian Health Plan of Michigan, Inc., Meridian Health Plan of Illinois, Inc. and MeridianRx, LLC.

As of Monday, no borrowings were outstanding under the amended and restated credit agreement.

The credit agreement includes negative and financial covenants, including restrictions on the company’s and its subsidiaries’ ability to incur additional debt, a requirement that the ratio of total debt to consolidated EBITDA does not exceed a maximum and a minimum interest expense and principal payment coverage ratio.

JPMorgan, SunTrust Robinson Humphrey, Inc., Merrill Lynch, Pierce, Fenner & Smith Inc., MUFG Bank, Ltd. and Wells Fargo Securities, LLC acted as joint bookrunners and joint lead arrangers. SunTrust Bank, Bank of America, NA, MUFG Bank, and Wells Fargo Bank, NA acted as the co-syndication agents. Goldman Sachs Bank USA and U.S. Bank NA acted as the co-documentation agents.

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

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